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Dubai Expatriates Unable To Meet Liabilities

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http://business.timesonline.co.uk/tol/busi...icle6728160.ece

Up to one quarter of all the cheques written in Dubai may be bouncing as expatriate residents in the Gulf state struggle as the economy slows.

Blank cheques are used to underwrite financial arrangements, such as credit cards, in Dubai, guaranteeing future payments such as a rental agreement or bank loan.

This system arose in the United Arab Emirates (UAE), which includes Dubai, because of the difficulty of doing credit checks on foreign workers. As many of these workers have now lost their jobs in the recession, the number of bounced cheques has risen.

The penalty for failing to honour a cheque is severe and some people have ended up in jail. Dubai’s police chief said this year that about one fifth of all prisoners in the emirate were there because of bounced cheques. Most of these are likely to be foreign workers.

Official figures for the first four months of this year showed that 544,196 cheques bounced — equivalent to 5.7 per cent. However, analysts believe that the total figure may be much higher once all private sector cheques are included.

As many as one in four cheques could be bouncing, according to Ghanem Nuseibeh, senior analyst at Political Capital, a consultancy firm. His estimate is based on data from local banks and figures for departing expats. Cheques are a fundamental part of the Dubai financial system — Mr Nuseibeh, for example, wrote 70 cheques to cover payments for his car.

RAK Bank, which operates in Dubai but is based in neighbouring Ras Al Khaimah, has said that 2,500 of its expatriate customers were leaving every month with unpaid credit card bills. These individuals were also likely to be leaving behind bouncing cheques for accommodation and cars.

During Dubai’s boom years, expatriates from around the world took advantage of cheap credit and a booming economy to live a luxury lifestyle. Easy credit arrangements meant that they could buy penthouses, motorboats and expensive cars with little or no scrutiny from lenders. When the economy slowed, many foreign workers lost their jobs or had their salaries cut and became unable to keep up with their payments.

Some abandoned their luxury cars at Dubai airport as they fled their debts and possible imprisonment. Some have been jailed while others have struggled to stay in Dubai.

“Many of the British expatriates in particular tried to hang on as long as possible to life there and sadly many have ended up writing bounced cheques, having their passports confiscated so they cannot leave the country and really living in appalling conditions in bedsits shared with maids, or even in cars parked in car parks,†Mr Nuseibeh said.

About 10 per cent of expatriates in the UAE have lost their jobs, according to a Yougov survey this month. This does not include the large number of construction and blue-collar workers who have also had their contracts cancelled.

Living the dream in jail.

Everyone everywhere has been living beyond there means it seems.

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Paradise Island Eh! I can not imagine why anyone would want to live thier. Its a horrible place, precocious, built on slave labour and going forward it is a country that can not self sustain. It has no society, social support, anything.

When it goes wrong all these Muppets come back crying to the Mother country - yeah US.

What will happen in time if the sand islands are not maintained. Will they fall back to the bottom of the sea.

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Blank cheques are used to underwrite financial arrangements, such as credit cards, in Dubai, guaranteeing future payments such as a rental agreement or bank loan.

that's the bit that blew me away - i mean, why would you?

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Paradise Island Eh! I can not imagine why anyone would want to live thier. Its a horrible place, precocious, built on slave labour and going forward it is a country that can not self sustain. It has no society, social support, anything.

When it goes wrong all these Muppets come back crying to the Mother country - yeah US.

What will happen in time if the sand islands are not maintained. Will they fall back to the bottom of the sea.

You could be talking about the UK apart from the Social support part ;)

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i lived in Saudi for a while - the whole area is just a big sandbox, a gigantic kitty litter tray :D Dressing it up with marble & glass and golf courses fed with desalinated seawater doesn't really change that long term - the shifting sands may swallow them all! :ph34r:

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that's the bit that blew me away - i mean, why would you?

It's common practice in the Middle East. I bought a car that way when I lived there. I had to sit in the bank and write out 36 cheques for the payments on it.

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It's common practice in the Middle East. I bought a car that way when I lived there. I had to sit in the bank and write out 36 cheques for the payments on it.

Did you know of many people who just ran away from their debts? :blink:

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Blank cheques are used to underwrite financial arrangements, such as credit cards, in Dubai, guaranteeing future payments such as a rental agreement or bank loan.

How quaint.

Here we call it the Treasury.

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Did you know of many people who just ran away from their debts? :blink:

I left in 2002 so no, not personally. I did speak to a friend in Dubai on the phone last week. He told me about another mutual friend who had done a runner to Malaysia from Dubai to escape his debts abandoning his wife and kids and visiting mother in law. :lol::lol::lol: He'd been living the high life for some time, got up one morning, realised he wouldn't be able to pay the rent that was due that day. He left for work as normal but just drove to the airport, bought a ticket to KL using air miles, sent the Mrs a text message and f***ed off. He's my hero.

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I left in 2002 so no, not personally. I did speak to a friend in Dubai on the phone last week. He told me about another mutual friend who had done a runner to Malaysia from Dubai to escape his debts abandoning his wife and kids and visiting mother in law. :lol::lol::lol: He'd been living the high life for some time, got up one morning, realised he wouldn't be able to pay the rent that was due that day. He left for work as normal but just drove to the airport, bought a ticket to KL using air miles, sent the Mrs a text message and f***ed off. He's my hero.

Well you can work out what kind of relationship he had. Not so much for better or worse, more, no money, no girlie. He just didn't hang around to be told what he already knew!

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I left in 2002 so no, not personally. I did speak to a friend in Dubai on the phone last week. He told me about another mutual friend who had done a runner to Malaysia from Dubai to escape his debts abandoning his wife and kids and visiting mother in law. :lol::lol::lol: He'd been living the high life for some time, got up one morning, realised he wouldn't be able to pay the rent that was due that day. He left for work as normal but just drove to the airport, bought a ticket to KL using air miles, sent the Mrs a text message and f***ed off. He's my hero.

I hope you are joking :blink:

He sounds like a bag of shit to me ;)

Hope the Malaysians put him in jail :angry:

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I hope you are joking :blink:

He sounds like a bag of shit to me ;)

Hope the Malaysians put him in jail :angry:

I've got more respect for him than anybody who would work for years on end just to pay the bank back.

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I've got more respect for him than anybody who would work for years on end just to pay the bank back.

Amazing - remind me not to lend you any money ;)

That attitude is probably why the Arabs have to throw foreigners into jail to make sure they get paid back their loans

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I've got more respect for him than anybody who would work for years on end just to pay the bank back.

Sorry? no one forced him to take the money, who else do you respect then drug dealers, muggers, car jackers? who exactly does get your respect - since normal hard working people obviously don't.

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Sorry? no one forced him to take the money, who else do you respect then drug dealers, muggers, car jackers? who exactly does get your respect - since normal hard working people obviously don't.

Actually, that's not necessarily true. In Dubai it is normal that you are required to pay 1 or 2 years rent in advance. There really isn't much option. The rent is payed up front in the form of cheques wich are then cashed periodically. It used to be that companies wrote the cheque and deducted the rent from your salary, but in the last few years many companies have forced thier staff to take over these liabilities.

If you get kicked out of your job after 3 months you're in shit street. As soon as you don't have enough money in the bank, the cheque bounces and you're in jail. You'd be crazy not to do a runner. Now, leaving the wife and kids is a different matter. That's pretty low.

JR

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Actually, that's not necessarily true. In Dubai it is normal that you are required to pay 1 or 2 years rent in advance. There really isn't much option. The rent is payed up front in the form of cheques wich are then cashed periodically. It used to be that companies wrote the cheque and deducted the rent from your salary, but in the last few years many companies have forced thier staff to take over these liabilities.

If you get kicked out of your job after 3 months you're in shit street. As soon as you don't have enough money in the bank, the cheque bounces and you're in jail. You'd be crazy not to do a runner. Now, leaving the wife and kids is a different matter. That's pretty low.

JR

Didn't realise it worked that way appreciate the info always good to be stopped from spouting b***** ;)

Agree about the kids, wife............depends on their relationship as the saying goes every marriage is a dark continent

Edited by Greg Bowman

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