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Big rise in dud cheques

Martin Croucher
and Amira Agarib (news@khaleejtimes.com) / 25 July 2010

DUBAI - One in every seven crimes committed in Dubai last year involved bounced cheques, a senior police official said.

Brigadier Jamal Salem Al Jalaf, deputy director of criminal investigation at Dubai Police, said that in 2009 police tackled 16,559 cases involving bounced cheques. The number represents a significant increase from the previous year. “For the whole of 2008, police recorded 6,462 cases,” Al Jalaf said.

The figures are a telling sign of the impact of the financial crisis on the emirate, as bank funding dried up at the end of 2008 and guarantee cheques began to bounce.

Moreover, Al Jalaf said that the number of bounced cheque cases in the first quarter of 2010 increased by 77 per cent.

He declined to give a figure across the board, but said that Bur Dubai Police Station — one of several across the emirate that handles such cases — had referred 5,200 people to the public prosecution in the first quarter of this year.

Andy Yiacoumi, business development manager at debt collection agency DECOL, said that the number of bounced cheque cases had “gone through the roof”.

“There’s a huge backlog of cases,” said Yiacoumi, whose firm recently hired two more agents to handle the growth in business.

“It’s becoming harder to collect here because cash flow has been hit hard,” he added. “Moreover, there are a lot of people who have skipped the country. By the time people come to us that company has closed down, or that person has run and can’t be found.”

However, the number of those who have been located and are facing the possibility of legal action has also increased.

Radha Stirling, who set up the UK-based charity ‘Detained in Dubai’ to provide legal aid to expats facing jail, is receiving up to 10 calls a day from residents unable to repay their debts. “This year, we’ve directly helped 100 people,” said Stirling.

“We have around 10 new people contact us for advice every day. Some of those we take on as formal cases, some of them are able to help themselves on the basis of the advice we give them.”

According to Jazz Al Bannai, general manager of Al Bannai Debt Collection and Recovery Bureau, a growing number of debtors are property investors.

“They bought property with a view to selling it quickly at a higher price,” he said.

“Then the property market crashed and suddenly they couldn’t sell the property. They ran out of money and then began to default on their mortgage repayments. The majority of cases are like that,” he added.

 

 
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