Banks prevent customers from obtaining financing for long periods due to “Rite Off”

Customers said that they faced a “prevention” from obtaining bank financing for long periods, sometimes exceeding a year or two, after informing the banks they deal with, Al Etihad Credit Information Company, which is responsible for collecting credit information for individuals and institutions in the UAE, that they had stopped paying for a period exceeding 180 days, which places them on the “Write Off” list and automatically reduces their credit rating to the minimum.

They confirmed to “Emirates Today” that these practices led to the disruption of their interests, and deprived them of obtaining any financing for an emergency matter, demanding clear controls requiring banks to remove the name of the dealer from the “Right Off” list, as long as there were no reasons for inclusion on the list, or his name was originally included by mistake.

They pointed out that their credit rating was severely reduced, even though they had not evaded payment or been involved in any banking violations, at a time when a customer indicated a clean banking record, and they described this method as a tool of punishment for the customer.

The term “Right Off”, in banking, refers to writing off debts with banks, due to the customer’s financial default, and it appears in the reports of Al-Ittihad Credit Information Company, which prevents the customer from obtaining any financing for a specific period of time.

Customer complaints

In detail, the dealer at a local bank, (S.M.), said that he had entered into a spiral of problems with the bank he had been dealing with since 2021, and he said: “The bank’s sales representative urged me to obtain a credit card as ‘free for life’, which prompted me, after hesitation, to agree, especially in light of the representative’s confirmation that my credit rating was good.”

He added: “I used the credit card for only one month, and paid all dues on time, then I stopped using it completely, and after a year I was surprised by a demand from the bank’s collection department to pay renewal fees of approximately 450 dirhams. Here I asked to close the card immediately, and I received a promise to cancel the fees, which was actually done.”

The dealer continued: “The surprise came a year after that incident, when I discovered that the credit card owed about 2,600 dirhams, consisting of renewal fees and late fines, even though it had never been used, and he asked to close it. So I contacted the bank and was referred to the legal department, and I was promised to review the matter, without any subsequent response,” stressing that he was shocked that there were fees on the card despite assurances at the beginning that it was free, then promises that the bank closed the card on its own, which gave the impression that the problem had ended, but The shock was greater when he discovered, while dealing with another bank, that he was listed on the Write Off list, which restricted his credit rating and prevented him from any new financing.

(S.M.) considered that the measure was punitive, and was taken against him without prior notification, despite his “clean” file with the banks, as he has owned and managed several companies in the local market since 2013, and had never stumbled or misused any banking products, but this behavior caused him “banking paralysis,” as he said, and he added: “The problem with workers in some banks is that they insist and call repeatedly when promoting their banking products, and if any problem occurs, they are dealt with… Dealing in an unacceptable manner.

Personal loan

In another case, a customer with another bank said that she had obtained a personal loan, and was paying the monthly installments regularly, even after she lost her job, as she remained committed for months, until she defaulted for a limited period.

She added: “I later joined a new job and submitted a request to schedule the financing amount. The bank agreed to pay higher installments to settle the obligation quickly, and I also committed to doing so. However, despite this, I was surprised by the suspension of my bank account and the appearance of the balance (zero) through the bank’s electronic application, without a clear explanation. Despite my repeated attempts to communicate and my continued payments, the restrictions expanded to include closing the bank account and stopping banking services.”

She continued: “After several months, I tried to take advantage of an attractive offer to buy a car, but the request was rejected on the grounds of a low credit rating. It then became clear to me that my status on the Write Off list was still in place since 2024, despite the personal financing rescheduling.”

She pointed out that some banks do not differentiate between “temporary default” resulting from humanitarian circumstances, and bad faith or deliberate evasion.

Punishment style

In turn, the customer (A.M.) said that a bank she deals with included her on the “Right Off” list for two years, as a result of a lawsuit she filed against the bank, in a case related to a credit card.

She added: “I won the lawsuit, and the bank was obligated by the court to pay compensation. Despite this, the bank informed Al-Ittihad Credit Information Company that I had stopped paying for a period exceeding 180 days (at the time the lawsuit was in court), and after the problem was resolved by communicating with (credit information), and after a full year, the bank returned again to put me on the (Right Off) list through a new employee, which necessitated resorting again to (credit information) for correction,” stressing that during that period she was unable to obtain any Financing, at a time when her credit rating number dropped to the lowest level.

A.M. believed that the bank used “Right Off,” a method of punishment, because she resorted to the Commercial Court to prove her right to the additional amounts she paid to the bank, unlawfully, for the credit card.

Complacency

For his part, banking expert, Ahmed Arafat, told Emirates Today: “Some customers are negligent in paying telecommunications bills, housing loan installments, or other obligations to the banks, for more than a month, and here he is contacted by the collection departments, and if there is no response, his obligations are placed as a defaulting customer (Rite Off) with the credit information company, according to the specified period, which is usually from 90 to 180 days. Therefore, it is very necessary for the customer to commit to paying. His installments are on time, and his credit report is reviewed periodically, even every six months.

In response to a question about updating the data and removing the customer’s name from the list, Arafat explained: “Amending the customer’s status from (Rite Off), and raising his credit rating, requires updating the data with (credit information). This is a process carried out by the bank after paying the arrears, or the customer can request it directly, if he actually makes the payment, and the bank is late in updating, which usually takes several months.”

He continued: “If there is an error in the customer’s data, which caused his status (Right Off), he can contact the bank through the customer service center, or fill out a data correction request through the Al-Etihad Credit Information Company application, which in turn contacts the bank for the correction,” pointing out that “some banks only look at the credit rating number, and if it is low, they do not look for the reason, and reject the customer’s request directly, while other banks enter into the details of the delay,” advising the customer to follow up on his credit status immediately, and correct any stumbles, if he wants to deal with banks smoothly.

Committed customer

For his part, the banker, Mustafa Ahmed, said: “Banks reject the customer’s requests as long as the status of one or all of his bank financing is found in red in his credit report, which means that he is in a ‘right off’ status, that is, in default,” stressing that “banks usually look for a committed customer who is able to pay his installments on time.”

Ahmed added: “Banks are subject to inspection and supervisory procedures that require them to take caution in the event that the customer is in default, or has late dues. This is a natural right for banks, but errors sometimes occur in the credit report, as a result of the delay in updating the data, and here the customer can request the update either directly from the bank, or through the Al-Ittihad Credit Information Company application.”

Ahmed stressed that when a customer’s financing reaches the “right off” stage, or a complete default on payment, his credit rating is immediately reduced to the minimum level. He said: “Unfortunately, some customers underestimate the matter and do not realize its importance except when they need to deal with the bank for an urgent matter, by requesting financing, a credit card, or other banking products.”

“Credit Information”: The smart application allows any error made by banks to be corrected

Al-Etihad Credit Information Company reported that the Central Bank has established specific procedures for the issue of the “Right Off” status of customer banks, but it is generally accepted that it does not apply to the customer himself, but rather to the financing contract whose owner stops paying for a period of 180 days, i.e. six months. The company added to “Emirates Today”: “Any error reported by banks to Al-Ittihad Credit Information Company can be corrected through the new smart application, which was recently launched, by choosing the (data correction) service, so that the bank that provides the data can be immediately contacted. To correct and remove the error,” and “Credit Information” stressed the necessity of reviewing the credit report every period to find out any developments in it, and then the possibility of correcting any errors in it.

Traders demanded controls requiring banks to remove the trader’s name from the “Right Off” list as long as there were no reasons for inclusion on the list, or his name was originally included by mistake.

Mustafa Ahmed:

• The customer’s financing reaches the “right off” stage, or complete default, which immediately reduces his credit rating to the minimum level.