After how many missed loan payments will a bank file a complaint with the police?


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Dubai: If you miss your credit card or loan payment in the UAE, you not only risk receiving uncomfortable calls from debt collectors, but you could also face a criminal and civil case filed by your bank or financial institution.

But how does a bank approach the case of defaults and after how many missed payments is a case filed? Here’s all you need to know.

When does the bank file a case?

“Whether it’s loans or credit card payments, the general practice is that banks file a case after three missed payments. However, it is important to verify the agreement signed with the bank, as it would contain details of the terms and conditions, ”Jihenne Arfaoui, a Dubai-based legal adviser, told Gulf News.

She added that banks take a step-by-step approach when a customer fails to make the necessary payment for a remittance.

The general practice is that banks file a case after three installments have been missed.

– Jihenne Arfaoui, legal advisor based in Dubai

“Banks or credit card companies first send a written notice asking for the amount, then they send a legal opinion through a notary, after which they can file a complaint with the police as well as ‘a civil matter,’ she said.

This implies that the client’s file is first moved to the bank’s collection department, which tries to contact the client and tries to collect the contributions. If the payment is still not made, the case then goes to the legal service, which begins the legal procedure, according to Arfaoui.

“Usually, there is a check that is put back as collateral by the customer when the loan or credit card is taken out. The bank hands over the check to collect the amount owed to them. In the event that the customer does not have sufficient funds to honor the check, criminal action is taken. The police will contact the person and call them at the police station, where they will have to pay the fine corresponding to the amount of the check, ”Arfaoui said.

What are the fines for bad checks?

Bounced checks with a value of 1 Dh to 50,000 Dh: 2,000 Dh
Bounced checks with a value of 50,000 to 100,000 Dh: 5,000 Dh
Bounced checks with a value of 100,000 Dh to 200,000 Dh: 10,000 Dh

“After this payment, the bank can also initiate a civil action, to obtain an unpaid lump sum, which is due. They submit the necessary documents like a return note, which provides the details of the returned check, the reason for the return and an explanation from the bank. In 2022, when the new law on bad checks comes into force, the bank will be able to take the unpaid check directly to the executive judge, so that the payment due is made, ”added Arfaoui.

Can I be stopped at the airport if I have missed a credit card payment?

Hari Wadhwana, partner at Dubai-based law firm OGH, explained when a missed payment could affect your ability to travel.

“Traveling outside the UAE and missing any installment payments to a bank or financial institution has no correlation. It is when the bank files a complaint against the person that the trip is affected. It is customary for the bank or financial institution to wait for three overdue payments before taking legal action, ”Wadhwana said.

He added that once the bank “applies the guarantee” – that is, presents the security check against unpaid financial debt – in the event of non-payment of the check, a police record is filed. Once the police file is filed, a travel ban is applied.

Traveling outside the UAE and missing any installment payments to a bank or financial institution have no correlation. It is when the bank files a complaint against the person that the trip is affected.

– Hari Wadhwana, partner at Dubai-based law firm OGH

“This is when the person cannot leave the UAE and the immigration authority will ask them to go to the police station or resolve the matter with the bank. The person can choose to settle the matter within the bad check penalty or to settle the debt with the bank, in which case the bank would remove the matter from the police. Once the police case is resolved or withdrawn, the person can leave the United Arab Emirates, ”he added.

I’m about to travel but missed a loan payment. How can I be sure that I am not stopped at the airport?

According to Wadhwana, while it is always advisable to first make sure that you have not made any default on payments, if you find yourself in such a situation, first check with your bank that the security check is not has not been submitted.

“You can also check with any police station or immigration office at the airport if there is a travel ban against you,” Wadhwana said.

He also provided a checklist to follow if in doubt before traveling:

1. Check bank statements for any checks presented by the bank or financial institution.

2. If the check is presented and declined, get confirmation from the bank that they have not filed any criminal proceedings. Pay the contributions as soon as you can.

3. Go to a police station or immigration airport to check if there is a police case and related travel ban against you.

4. In the event of a delay in the payment of down payments, inform your bank account manager. Also, notify them of any changes in your payment plans.


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