Most of the time a debtor who is an employee, has a high DBR due to the high salary loan EMI and so upon remedial request, the response is always that the account is regular, and the customer cannot be restructured to reduce their EMI!
Naturally the account is regular, because the employee’s salary is directly credited to the account, where instantaneously the personal salary loan and any credit cards the customer has, are debited. So, if the customer has high EMI’s then more than 50% of their salary is debited, where remaining EMI’s cannot be serviced in full, resulting in the customer having no money to sustain themselves and their families.
You might say ‘well it’s their fault’, or ‘they should have thought first before applying for the salary loan and affording multiple top-ups”, but realistically, many customers applied for those loans and cards prior to the credit bureau being fully operational, resulting in over exposure, of which we are all very familiar with at this time.
They can’t reverse the situation, they can only request a review for consideration to reduce this EMI, where many instances it is blankly refused for the reason stipulated herein. If the customer’s salary continues to be credited to the same salary bank account, then what is the problem? High DBR? Well yes, they would have a high DBR and it is the core reason they are requesting a restructure, or does it not make any sense? The objective is to reduce their DBR, where this is a very key situation that must be reviewed by most creditor banks. I can count on half of my hand where some banks are approving such remedial requests, the rest refuses.
On the issue of delays in remedial requests, there are cases up to 1year that has been escalated to the highest management level, still with no outcome, only the customer continues to receive monthly collections calls, where the request is not being facilitated by anyone. So, my question is, how is this possible? If a customer is terminated from he’s employment, is unemployed for 8months, secures an investor and registers a company in he’s name, is fully operational and commences payment of he’s default EMI’s, but is unable to cope with ‘catching up’ on the old EMI’s, how is it possible not to review this very important case for approval?
The cases referred to in this article are not ridiculous requests, where the customer is totally over-exposed, in dire delinquency in all their accounts, quite the contrary, these are customer’s who were disciplined in controlling their EMI’s and had the foresight that soon that they would struggle to meet their existing EMI’s. Due diligence is applied, the possibility of restructure doable, so why is the customer’s request pending for such a long time with nobody taking responsibility?
When official complaints are lodged, they are pending for a while with an excuse that the case was closed as the customer is not responding to requested documents for submission, when the remedial company initial ensured that the bank had all the required official documentation?
There is a visible gap in this process, of no continuity, nobody taking responsibility for the outcome and if it is not diligently followed up, it will disappear in the mist, resulting in the customer facing legal action, which is not warranted, as the customer informed them that he is unable to cope with he’s existing EMI.
We have had an SME case where the customer was requested to present additional documents for 3months, with a promise that the restructure would be approved, only to attend a final meeting and be informed in 5mins that ‘their solution would be to secure a cash injection from some source!’, this when the customer had identified that in the following months they would be facing a problem meeting their EMI’s, which means they were not in default yet. Naturally it’s a logical assumption that the solution for anyone in this situation is a cash injection, so who would invest in company liable for debts and why would the owner apply for more credit from banks at this stage? Now 3months has passed, the case is escalated to the senior management, with zero response!
My question: “where is the bank’s senior management’s sense of responsibility to review the customer’s history together with the middle manager’s decision, to ascertain the viability of approving this case?
There is a dire lack awareness of a creditor’s entire debt exposure, versus their one liability with a specific bank, yet the bank is presented the entire exposure justifying the remedial request, so if a remedial company is facing this problem, what about debtors facing it on their own and struggling to secure an outcome?
There are many dire situations debtors who are willing to repay their debt face every day and they find the same form of adversity from many of the creditor doors they knock on and I just wonder when this will be a seamless process, where everyone joins hands to make this world a better place.
Note 1: Theda Muller is a UAE-based author of two books: Embrace Financial Freedom Volume One: 10 Proven Ways To Release Debt And Emotional Fears In Today’s Economy, and Volume Two: Releasing Fear And Bouncing Back From A Debt Crisis. She is also the CEO & Co-Founder of the remedial company EFFRS LLC, Dubai. She also conducts webinars and workshops on debt recovery.]
[Note 2: The views expressed are the author’s own and do not reflect in any way, the views of Emirates 24|7. Readers are advised to carry out their own due diligence before taking any decision.]