OFWs urged not to take out loans in UAE
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MANILA – The Department of Foreign Affairs (DFA) issued a reminder to Filipino workers based in the United Arab Emirates against taking out loans and using credit cards.
"This advisory is being issued in view of the alarming increase in the number of Filipinos detained due to unpaid loans," the DFA said.
According to the DFA, low interest rates lure OFWs to apply for loans for various reasons without paying much attention to the other charges which appear in the fine print, and the prospect of taking as much as 18 months of one’s salary. Usually, banks require only a certificate of employment to approve a loan application.
"Debt-related cases are extraordinarily difficult to handle especially if the lenders, both banks and individuals, have filed criminal or civil cases against the borrowers," the DFA explained.
It added, "Once a civil case has been filed against a delinquent borrower, a travel ban is automatically imposed against the borrower and he or she would be unable to leave the country".
Likewise, issuing a bounced check is a criminal offense in the UAE. Lenders usually require borrowers to affix his or her signature on a blank check as a security measure. When the borrower defaults on his or her obligation, the check will bounce and criminal charges would ensue. If the signature on the check is proven original and authentic, the case against the borrower is upheld in court. These cases also apply to co-makers and guarantors of the borrower.
"For instance, two Filipinos had difficulty in leaving Dubai due to unpaid loans. One was stuck in Dubai for 14 years after he defaulted on his bank loan worth AED80,000 or US$21,700, while another was stuck in Dubai for several years after the lender, an Indian national, filed a case against her for non-payment of a personal loan," the DFA cited.
Loans are considered as private matter between the lender and the borrower and Philippine diplomatic missions cannot intervene in these cases, the DFA clarified.
This situation also occurs in other Arab Gulf Cooperation Council (GCC) countries, and to a lesser degree in Saudi Arabia.
"The OFWs are encouraged to be wise in spending and saving their hard-earned money to avoid incurring loans from banks and private individuals," the DFA said.
According to the DFA, low interest rates lure OFWs to apply for loans for various reasons without paying much attention to the other charges which appear in the fine print, and the prospect of taking as much as 18 months of one’s salary. Usually, banks require only a certificate of employment to approve a loan application.
"Debt-related cases are extraordinarily difficult to handle especially if the lenders, both banks and individuals, have filed criminal or civil cases against the borrowers," the DFA explained.
It added, "Once a civil case has been filed against a delinquent borrower, a travel ban is automatically imposed against the borrower and he or she would be unable to leave the country".
Likewise, issuing a bounced check is a criminal offense in the UAE. Lenders usually require borrowers to affix his or her signature on a blank check as a security measure. When the borrower defaults on his or her obligation, the check will bounce and criminal charges would ensue. If the signature on the check is proven original and authentic, the case against the borrower is upheld in court. These cases also apply to co-makers and guarantors of the borrower.
"For instance, two Filipinos had difficulty in leaving Dubai due to unpaid loans. One was stuck in Dubai for 14 years after he defaulted on his bank loan worth AED80,000 or US$21,700, while another was stuck in Dubai for several years after the lender, an Indian national, filed a case against her for non-payment of a personal loan," the DFA cited.
Loans are considered as private matter between the lender and the borrower and Philippine diplomatic missions cannot intervene in these cases, the DFA clarified.
This situation also occurs in other Arab Gulf Cooperation Council (GCC) countries, and to a lesser degree in Saudi Arabia.
"The OFWs are encouraged to be wise in spending and saving their hard-earned money to avoid incurring loans from banks and private individuals," the DFA said.
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