Add to Technorati Favorites expat Abu Dhabi Dispatches: October 2011

Monday, October 31, 2011

Damn Banks II

I received a comment on my last post from Anonymous who seems to be an insider at one time. It was very informative and brought up some good points that I had to answer. The comment was long and my responses were at least just as long so I decided to make a new post. Maybe we all can learn something and clear up some misunderstandings, if any.

Anonymous is in yellow text, mine in white.

Anonymous said...

    LOL! SOME of what you said is true, some are "spiced" if you will.

    BTW, that building that you said came from somewhere... It isnt OWNED by NBAD. That building is owned by a member of a royal family. 3 floors are rented by NBAD.

You maybe have me there! I looked for a stock photo of a big building with the NBAD logo on it for the first photo. Its kind of a blogging thing. Here is the real HQ, the NBAD tower.

NBAD Tower

    There is no link with immigration, or with the traffic dept. If you want I will tell you the exact process (I had sadly asked that many ppl be bared from flying myself)

When a person properly quits their job, they have to surrender their passport to their employer/sponsor and will only get it back (on the day of travel) after all paperwork, including clearance letters from the banks et al, are submitted. If an expat cannot provide these, they do not get their passport back until all debts are paid. They can't leave as they have they have no passport, job or home at this point. I have heard jail is a desperate option.

What this does is creates the runner/absconder phenominon. Things go bad here with some folks for various reasons and they are deep enough in debt they cannot come up with the cash to settle local debts. So instead of having the option of leaving and paying the debt from abroad, they get desperate and just escape. I see enough dusty cars with flat tires in airport parking lots to know this is quite common. I think most people want to pay their debts but these rules force some into a corner. Seems the banks stand to lose more the way things are than trying to work with their customers before it becomes a legal problem.

Curiously, as I said in a previous post the banks seem uninterested in retrieving these automotive orphans to mitigate losses.

Banks Seem Unconcerned About Recovering These Assets, They Are Everywhere

    Also, there are reasons why banks here cant allow people to pay for debt from abroad. Mainly because you cant enforce it in any way. If a bank scares you into thinking that it can "get" you when ur back home, they are usually mistaken. Few are the countries in which a bank here can get a bad debt holder to pay. Truth.

I think that is changing. I recently got a small personal loan and was asked for family addresses back in the US and my Social Security Number so I could be easily located.Debt collector firms wordwide purchase bad debts from banks all the time and take on the risk of recovering the debt. VISA and Mastercard are also global companies with aggressive collection methods and could damage my credit rating back in the US.

    There are however non official ways to continue to pay for asset backed loans (Like a car or house) but we wont get into those. I will say that I had set a few such schemes up for customers and they did not cause me any issues till the day I left. But not all customers are like that. With 20% of the country being labor, and another 30% being low level employees (with low incomes) you simply cant take chances with everyone. It it really is a chance.

    The banking system here is based on caution. In the UAE it's the exact opposite. Yes, a healthy way to be would to have a nice balance, but you have to understand the contact, this region is not a stable one. the UAE may be stable, but it's surrounded by shit and bad stuff.

    Also, with 90% of the country's population foreigners, the control you have over securing your loan is close to nil. Truth is if you take out 500K worth of loans and leave within a week, the bank will have no warning and little recourse.

I think any of the banks here would go after someone owing that amount of money. They would be crazy not to.

    As for banks not being all they can be to consumers, it depends both on the bank and the consumer.

    If you have a salary of 55K, a 1.6 million mortgage, a car loan, a personal loan, and credit cards, the banks are the best you'll ever deal with.

    If you make 55K and send 45 back home on the same day, most banks wont care about you.

I truly understand about the demographics here and the difficulties they bring.

    Also, not all banks here have the same focus. NBAD has, and is, and probably always will be a corporate bank. Its main job (originally, and still) is to be the banker of the Govt of the Emirate of Abu Dhabi as well as govt owned companies, semi govt companies, and large corporations.

    Do they have consumer banking solutions? yes. Are they good? Maybe. Are they the best? No.

    For a consumer, a more consumer focused bank like RAK bank might be a better option. RAK Bank is one of the few UAE banks that does NOT have a corporate banking section. Only consumer (you) and SME (Your small business)

    As for consumer rates (You mention a credit card at 35%) yes, it is highway robbery. But things are getting better. A few months back the central bank limited what a bank can offer and charge in terms of base banking and lending. CC were not included. Maybe in the revision next year. (Last year a certificate of liability costed 400, today its no more than 100 by law)

I have VISA and MC CC's with US banks that charge 10-12%. I agree 35% is very excessive for the same here. I took that aformentioned small personal loan (unsecured) for a very reasonable single digit rate. The credit cards are a cash cow and are aggressively marketed by commissioned salespeople. The rules seem lax and a lot of naive newcomers succomb the the lure of easy and high credit limits.

    The lack of a central lending database = ppl can get into debt easily and with multiple banks without the banks knowing. But this isnt the banks fault. The lack of the data base is the system's fault, but no one forces all these morons to sign those loan agreements.

 You are right on this. Theoretically, a person can get multiple credit accounts from several institutions without being qualified for the aggregate of the limits. This would not happen in countries with an independent credit bureau because that person could be tracke and info shared between financial institutions. In the US, every citizen has a credit score which sets limits on the amount that can be borrowed.

    It simply isnt anyone else's fault if you cant manage your finances.

I agree with you on that, but it seems a lot of people get into trouble in the UAE and that trouble can cause very serious legal consequences. In my opinion, the banks are like drug pushers making easy credit available to most. Hell, I bought a 99,000AED car on 100% credit after just 90 days on the job. Was that dumb...yes! Would I do it! That car is sold now and I currently free of debt, at least in the UAE. I know many that are way over their heads in credit balances and will have to be in the UAE many more years than they want.

But ultimately it was my decision as I rose to the bait and took the hook.The banks are enablers but it is ultimately the individual that is responsible to refuse the offer.

    But yeah, you added alot of "baharat" (Spices) to the story Ace.

I didn't intend on singling out NBAD. They have treated me quite well except for the online banking troubles. My post tended to drift toward the overall financial system in the UAE as seen by a retail customer.

You are/were obviously a bank employee. I appreciate the insight and if there is something I failed to understand, let me know and maybe I won't sprinkle as much "baharat" on my future posts about the rules here.

I just received an email today, 19 November, from the bank addressing my initial question I asked on 29 October, see below.

Email from Ace to the National Bank of Abu Dhabi, 29 October:

I am now blocked from my online account. I need this fixed as I have bills to pay. Your phone message says 24/7 service for the online accounts and I was informed I could not be helped after 11:00 PM as the technical service was closed.

Ever since the website has changed, there have been problems.


The "prompt" reply 3 weeks later, 19 November:

Dear Ace,
Thank you for your recent email.

You are kindly requested to reply the following to help us process this faster:
1. NBAD Account number:
2. PO Box number:       
3. Branch you received the password from:
4. Mobile/Telephone number:
5. NbadOnline User ID: 
6. time to be contacted :        
For any further assistance, please do not hesitate to contact us again on toll free 800 XXXX  from outside UAE) between 8:00 AM to 12:00 AM on all UAE working days (from Saturday to Thursday) or send us a reply email.
Thank you for using nbadOnline.
Back Office Person
Internet Banking Unit
National Bank of Abu Dhabi

I had better luck with the telephone help-line and the problem was solved 2 1/2 weeks ago through them.  Apparently the email guys are not only unaware that the problem was fixed a long time ago by a 1 1/2 hour call to the help-line, they are just getting around to looking at the problem 3 weeks after my initial email complaint. Unbelievable!!!!

I expect things to work once they are set up. Here  internet , banking , electricity and cable TV services are very fragile and I have experienced many unexpected shutdowns. I cringe when I have to enter the labyrinth of what is called "customer service" in Abu Dhabi. It has always meant a time consuming and frustrating experience trying to correct a situation that was not of my making.  

Sunday, October 30, 2011

Damn Banks

Both Abu Dhabi and Dubai have become huge world financial centers in the past 40 years. With the oil export and tourism income there is plenty of cash flow that attracts international banks as well as made home grown institutions very wealthy. For the most part these banks are some of the safest and most innovative in the world. One can even instantly pay a parking meter or almost any bill from a cell phone text message.

However, the banking business must be the lowest risk enterprise in the UAE. I am sure they take care of each other and big corporate clients in the "Good Old Boy " club but the ordinary retail guys seem to get it in the neck. 35 % interest on credit cards and an unholy alliance with immigrations assures a healthy profit and jail time for anyone attempting to leave the country with debt.

You will take it and like it! (Apologies to Gunny Ermey!)

Many innocents are lured with fast and easy credit when first arriving here and get into a big bind. It is tempting with the apparent affluent lifestyle of fancy cars and designer shops.  People should pay their debts but should be able to do so from another country if they choose. That option is not available here.

But Solar Powered ATMs Are

I recently had problems with my bank, the National Bank of Abu Dhabi (NBAD). This firm sent out a notice a few months ago that they were upgrading their website and I would have to make some adjustments such as losing my templates I used to transfer money and pay bills. From my past experiences with the national telephone, internet and cable TV companies, I had a strong feeling this website upgrade was not going to end well. It didn't.

We Like You!!

Two days after the "upgrade" I tried to log on and got errors and denied access. I called the help desk and was assured the problem would be handled and I would be called back with the magic solution. No call back for 2 days. I called again and my password was reset....failure again. I made my 3rd call and was told I can't be helped because the technical center was now closed despite the on-hold recording proudly announcing online help was available 24/7. The same recording told me to press 4 for online support and after suffering through more minutes of raucous advertisements it told me to press 6 for the special online help desk. So I did.

Mind you, I have a lot of bills to pay back in the US and I have to refill that bucket every month ontime or suffer some very expensive consequences. That urgency was lost on my bank. I finally got the site working after another lengthy phone call only to find it takes many more levels of security, passwords, questions, token codes and I had to redo all my payment templates. Very clunky and not an improvement. I do not mind security, but this could have been made sleeker and more user friendly. I suspect I will cringe everytime I have to do online banking again. I just expect something else to go wrong.

This Big Building Didn't Just Spring Out Of The Ground By Itself

Overall, NBAD is not a bad bank but they screwed this up. Remember, the rules are different here and things are definitely tilted in the banks' favor. You will not win, ever. The vast majority of my friends and co-workers have horror stories about their dealings with UAE banks.

My recommendations:

DO NOT get a local credit card, even if it says Visa or Mastercard on it, the rules are different. Read the fine print. Keep cards and debt in your home country.

DO NOT buy a new car. Get a good used one, they are cheap and plentiful.

DO NOT go into any kind of debt here. The banks are ruthless and if things go tits-up for you, you could get prison time. Its the law. You will severely limit your "options".

DO NOT  keep more in your local UAE account than you need to live on month to month. Send the excess back home. The banks will take what is in your account on the slightest pretense such as a traffic violation. Geez, they even want ~$40USD to give you a clearance letter saying you do not owe them any money.

I am not picking on the UAE banks specifically, they just have their own rules that are bad for us consumers. The banking industry in the USA has caused far more damage to the global economy and hurt more people than a UAE bank could ever do. Shame on them and their greedy ways. They screwed up a good thing, may they rot in hell!

Friday, October 21, 2011

Automotive Orphans

Firstly, let me explain my lack of posts in the last few months. I have been on kind of a "Blogcation". There are several reasons for this. The summer is brutal here and staying indoors is a survival tactic. Since I am not a mall rat or movie theater kind of guy (I prefer watching movies in the comfort of my own home where cold beer, cheap popcorn are at hand and the loo is but a few steps away), that means long, tedious and boring days off at home.

Much like folks that live in Northern climes during winter, one develops "cabin fever". This phenomenon dulls the senses, encourages laziness and crushes creativity and motivation. Since I no longer own a car, journeys outside are not as spontaneous as they used to be and I have been doing fewer interesting things to write about.

Now, the weather is moderating and I am coming out of my summer hibernation. I can leave the windows open now and  feel the cool breeze. I feel my energy coming back and the creative juices are flowing again like sap in a tree at springtime.  So look for more activity from me in the next few months. I have a lot of catching up to do.

Cats are cool, this one is confident and fearless 18 stories up balancing on a thin rail. It just doesn't give a crap! I wish I had the powers that cats have. I love this photo!

Now to the topic. In Abu Dhabi and the U.A.E. as a whole, there are thousands of abandoned cars. You see them everywhere from airports to residential parking garages to streetside downtown. They are instantly recognizable due to the heavy coat of dust they sport. Most have messages scrawled on the dusty windows such as "please wash me" or "runner" (more on this later).

"Wish my girl was as dirty". Hint for the Ladies! Spice up your life!

These are not old rustbuckets that were destined for the junkyard either. Most are late-model Porsches, Mercedes, Audis, Jaguars, BMWs and other desirable makes. In the parking lot of the place I live, I have seen the same abandoned cars sit for over two years. The management here even has them washed once in awhile so they wouldn't be such eyesores. I find that hilarious! Don't fix the problem, just make it look better. Kind of symbolic of the way things are generally handled here.

This Audi TT has been here for 2 years! It is washed occasionally by management.

Recently Getting Police Attention

Tires go flat, batteries die, paint dulls and the interior appointments dry and crack from the sun and heat. Why are these fine automobiles left to rot in the extreme elements here?  The simple answer is that the laws in the U.A.E. are to blame. You see, it is illegal to leave the country for good if you owe money.

If you do the right thing and inform your employer of your intention to resign or are fired, the employer informs the bank and the bank informs immigrations if you have a credit balance. In most countries, you are allowed to pay back debts from abroad. Here, you will be detained, arrested and checked into the "Gray Bar Hotel" as you attempt to leave the U.A.E. owing money.  Everyone must have a bank clearance letter to emigrate.

This harsh treatment and wicked alliance between the government and the banks forces some expats facing a dire situation (you cannot stay here without a job) to just leave without notice and abandon everything behind to escape prison time. These desperados are known as "runners" and the dusty cars littering the parking lots around the U.A.E. are their legacy. This is one of the reasons I sold my car and have resisted the temptation of going into debt with a local institution.

A Nice Volvo

Abandoned BMW

The vast majority of these cars are owned by the banks through loans to individuals yet they sit for years in the same place where they were abandoned. While the banks are aggressive about punishing individuals that owe them money, they are curiously passive about recovering these cars so they can resell them and cover some of their losses. Its like they don't give a damn, just another cost of doing business. Such a waste seeing these fine cars rotting away. Where I come from, the banks hire "repo men" to recover automotive assets within a few months. Here it seems more important to send someone to jail than to mitigate losses by actively recovering these cars. Just another example of how I have trouble understanding how things work over here.

I never have and I never will! 

VW Scirocco ,  not abandoned but I want one!