Monday, 25 May 2009

Rising number of credit card defaulters run from the UAE

From Thomson Reuters
Some UAE banks are seeing up to 2,500 customers leave the country every month without paying off their credit card bills, a number that could rise in June, a senior RAK Bank official said on Sunday.

RAK Bank business advisor David Martin said most of those leaving without settling their credit card bills were linked to the construction sector in Dubai, the hardest hit of the seven emirates that make up the United Arab Emirates federation.

"On our credit card portfolio, in common with other banks, we are seeing increasing numbers of 'skips' - that's people leaving the country without paying their bills," Martin said.

Martin said the bank's research indicated banks in the UAE have 1,500-2,500 customers leave every month over the past six months without paying what they owe on credit cards.

RAK Bank, which has around 20 percent market share in the country's credit card sector with around 300,000 customers, has seen around half that rate in the same period, Martin said.

"The instances of skips in our bank, according to our own intelligence, is 50 percent below our competitors," he said.

"Most of the skips are connected to the construction industry in Dubai. We don't see a lot of skips in Abu Dhabi or Sharjah."

Thousands of expatriates have lost their jobs in the Gulf trade and tourism hub of Dubai since the financial crisis triggered a real estate crash late last year that ended a six-year economic boom.

Although growth in the number of "skips" has begun to level off in the past two months, Martin said, banks in the UAE could face a new wave of customers leaving with their debts unpaid as expats who have lost their jobs may wait to the end of the school year to leave.

"We could see a resurgence of this at the end of June," he said.

RAK Bank recovers around a quarter of the debt that goes unpaid as a result of one of the customers leaving the country, Martin said. (Reuters)


  1. What happens if you skip? Do they track you down for repayment or do they put it into the hands of a credit agency in your home country that's assuming they find you at all.

  2. 5.20.09
    The NBC pundits are dead wrong again. This is not the bottom of the recession. Its not the beginning of a true recovery. Its only a brief period of optimism or the beginning of that short and shallow revival. There will be some positive signs over the next year or so amoung the negative. But they will not lead to a true recovery. Our leaders may claim to end the recession in 2010. If that claim is made, it will be based only on that short and shallow (printed) revival. It absolutely will not last. I stand by my predictions made earlier this year. Obama's efforts are revolutionary but they are too little too late. He will have no choice but to acknowledge a severe US depression by the end of his first term or shortly thereafter. Every major economy in the world will be in depression by 2015.

    The NBC pundits (Chatzky and Wong) are bound and determined (paid) to plug their coorporate sponsors and perpetuate the 'multiple credit card' lifestyle. Their claim is that you need more than one to build reasonable credit, finance a home, and be relatively secure financially. THAT IS ANOTHER FLAT-OUT LIE. The industry is simply too corrupt and predatory to deal with. It has been for at least 20 years. The use of 'multiple credit cards' is simply too risky, addictive, complicated (check that fine print), and ultimately expensive. In the vast, overwhelming majority of cases, the 'multiple credit card' user has ended up further in debt year after year after year. Their credit was built to some extent on a temporary basis and their ability to repay loans was diminished gradually right along with their bottom line. They ended up paying as much or more in finance charges as they did on principal. That is OBSCENE. Now, their net worth is way down. Their ability to get out of debt f#$&@#. That 'credit' didn't get them anything but F#$#@#. Still, those NBC pundits (liars) have the nerve to perpetuate that 'multiple credit card' lifestyle as if it were ever legit or necessary to begin with. It wasn't. Until two years ago, one could have built reasonable credit with a stable income, a checking account, a savings account, one secured credit card, one loan for a used car, one loan for a new car, and a reasonable downpayment. Until recently, that was enough credit to get a first home loan. Now, the economic boom is OVER. The majority are F#$&@#. Its only going to get worse. A LOT WORSE. The window for ordinary (decent) people to stake their rightful claim is closing fast. They better get out of debt soon and well prepared for the comming US/global depression. It will be catastrophic. Under these circumstances, it is downright reckless and irresponsible to promote more use of credit cards. Only a calculated PIG with an ulterior motive would have the nerve. The 'multiple credit card' lifestyle wasn't the only cause of this economic crisis but it was a contributing factor. Another vehicle amoung many to transfer wealth from poor to rich. Which again, is the single greatest underlying cause. IT WILL BE OUR DOWNFALL.