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29 March 2024

Your bank can't hike fees without your consent

Published
By Mohammed Al Sadafy

The Dubai Court of Cassation has ruled that banks have no right to charge from credit card holders any additional fee not mentioned in the original contract without the prior written approval of the customers.

The court said banks must get written approval of customers if it is revising the credit card fee, even if the bank is relying on a clause in the original contract that it has the right to revise the fee.

The court stressed that the judge was taking into account the interests of the credit card holder while interpreting the condition in the original contract that the bank has the right to revise the credit card fee.

The ruling was issued in a case filed by a bank operating in UAE against a customer holding two cards (MasterCard and Visa), asking him to pay Dh35,000. The Court of First Instance ordered the credit card holder to pay Dh19,000. Both the plaintiff and defendant appealed but both of them did not accept the ruling of the Court of Appeal also and went to the Court of Cassation which issued the above legal principle.

The bank's appeal was based on objections to the report of the expert who said the bank cannot provide ‘customer credit protection service’ in return for deducting 40fils for every Dh100 from the monthly credit card balance.

The court rejected the appeal of the bank and ruled that the clause giving the right to the bank to revise the credit card fees is arbitrary. This clause must be clear and unambiguous and the bank must notify the client of any change in the fees and obtain his consent in writing, it ruled.

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