x Abu Dhabi, UAEFriday 19 January 2018

On the Money: getting to the bottom of a bank 'service' fee

If I owe a bank money, it will do everything in its power to get it back from me. But if it owes me money, I have to wait.

Gary Clement for The National
Gary Clement for The National

Since I opened my bank account in the UAE nearly four years ago, my bank has been deducting a Dh100 service charge from my account. At least I think it is a service charge. When I receive a text message from the bank at the end of each month confirming the deduction, all it says is "charges", so I have to assume that's what it's for.

The word "service" is a contentious issue in the UAE, where many people complain that there is a severe lack of it. Which makes me wonder what service I'm being charged for. I do all my banking online, so don't use the services of a bank teller. Perhaps the service is to allow me the privilege of depositing my money with them.

In return for this privilege, I get a minuscule 0.25 per cent interest paid per year on my account. And the bank takes Dh100 from me every month for "services". It doesn't add up, does it? And it brings to mind that old saying, profits before people.

So it came as a welcome surprise earlier this year, when the Central Bank announced new banking regulations that required all lenders in the UAE to scrap a raft of fees, including account-keeping fees, which I think are the same as a service charge.

Banks were also required to cap personal loan amounts to 20 times a person's salary, limit maximum payment terms to four years and car loans now require a mandatory 20 per cent deposit, just to name a few of the new rules.

The Central Bank said the regulations, which came into effect on May 1, were designed to curb high fees and excessive lending.

Anyway, after yet another text message from my bank on October 30 informing me that it had deducted Dh100 from my account, it hit me. The bank shouldn't be doing this anymore. So I called customer service.

It turns out that my bank had apparently sent a letter to all account holders in July last year informing them that if they earned a minimum of Dh15,000 a month and their salary was transferred into their account, they would no longer have to pay this fee.

Let me say that again: July. Last year. That would be 2010; not 2011.

And here's where it gets interesting.

I didn't receive that letter the bank claims it sent. So for the past 15 months, I've been paying Dh100 a month for something that had been scrapped by my bank. That's Dh1,500. It may not seem like much to some, but it would go a long way in many households in the UAE these days.

Nobody from the bank contacted me. There was no follow-up call to the letter that it says it sent. That's something I would call good customer service.

The bank didn't even implement an automatic stop on the charge for all account holders who met its Dh15,000 salary criteria after it sent out its letter.

Instead, the onus was on the customer to contact the bank to stop the charge being deducted from their account every month. That's what I would call bad customer service, not to mention an underhanded way to profit from unsuspecting customers.

I told the customer-service agent this, knowing that our conversation was being recorded. I know it's not their fault that I continued to be charged Dh100 by the bank they work for, but I hoped that somebody in a position of authority would later listen to our recorded conversation and do something about it, like checking which accounts were still being wrongly charged the fee and ordering an automatic stop on it. I guess that is wishful thinking. Or perhaps a little too logical.

The end result? On November 1, I received a mysterious Dh400 transfer into my account. There was no explanation and the SMS didn't reveal what it was for.

On November 2, I received a phone call from my bank. That mysterious Dh400 transfer was explained. I had been reimbursed for just four months of the obsolete charges. "What about the other 11 months?" I asked.

"We don't have access to your statements to prove that," the customer-service agent said.

"But you've been charging me this for 15 months despite it being scrapped in July last year," I said. "You still owe me money."

"We can make a request to check your statements," they replied. "And we'll be in contact in another two to three days, depending on the Eid holidays."

I see. If I owe a bank money, it will do everything in its power to get it back from me. I could even face jail if I failed to pay back the money I owed it. But if it owes me money, which it has done for the past 15 months, I have to wait.

But that's OK. I know I'm right. And I'm also not going to insist on it paying me interest on the amount it owes me. After all, it would only be 0.25 per cent, right?