Red Notices for bounced checks - INTERPOL as the UAE's collection agency

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For a while, it seemed that the United Arab Emirates (UAE) might stop using INTERPOL's Red Notice system as a private business dispute resolution agency for its financial institutions.  In the UAE, it is common practice for financial institutions to insist that mortgage recipients supply them with a "security check," or a check for the full amount of the mortgage.  If a debtor falls ill, loses his job, or fails to make a mortgage payment for any other reason, the check is deposited, promptly bounces, and forms the basis for a fraudulent check charge.  The fact that a fraudulent check charge requires fraudulent intent at the time the check was issued is routinely dismissed.

For foreign nationals who left the UAE after losing their jobs or legal status in the UAE and bouncing a security check, the financial institutions turned to INTERPOL.  They sought and received Red Notices against the debtor, regardless of whether the debtor wanted to default on the mortgage or not.

A public outcry and the efforts of several organizations, including Detained in Dubai which is  ably led by Radha Sterling, seemed to have led to the cessation of the UAE's seeking Red Notices for bounced checks. The UAE's page on INTERPOL's website showed a drastic decrease in financial/banking/fraud charges and a higher percentage of what would be considered "ordinary crimes," such as crimes of violence.

Also, the banking law with respect to bounced checks was changed- but not for foreign nationals.  After an initial report to the contrary, officials from the UAE clarified that the decriminalization of bounced checks would only apply to UAE nationals.

In the next post:  is the UAE still misusing INTERPOL's Red Notice system for civil collection purposes?

As always, thoughts and comments are welcomed.

 

Topics:  Debt Collection, Debtors, Fraud, INTERPOL, Mortgages, Red Notices

Published In: Criminal Law Updates, Finance & Banking Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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