View of part of the Fujairah Corniche and the Hajar Mountains in the Background

Thursday, June 5, 2008

Beware Bouncing Cheques in the UAE

A story from Fujairah cropped up this week (4 June 2008) concerning a man who issued a cheque to pay for some goods. The company went to bank the cheque and it bounced and when this was reported to the police the customer ended up in jail for two months.

On the surface, this punishment looks harsh. Not being present in court I am only going on the details reported in the newspaper.

Was it because the amount was large, in this case Dh290,000 and the higher the amount, the higher the bounce and the higher the punishment?

Was it because the man was of a particular race? It is good that the man’s name was withheld with only his initials printed but it is unfortunate that in the space of four short paragraphs his nationality is referred to three times. The UAE publishing law is clear about people, especially journalists, not doing or writing things that would discredit the United Arab Emirates so why mention the expatriate’s home country in triplicate?

Bouncing cheques in the Emirates is a serious business. Many expatriates in the UAE will have had the embarrassing experience (especially in the age when bills were paid by cheques rather than by credit cards, phone and Internet banking) of writing a cheque and then finding that you (or was it your bank?) did not have the funds in your account when the cheque was cashed. Banks usually have a standard fee that they charge for such a misdemeanour. Read the story of the person who received an ‘excessive’ double charge totaling £72 by an English bank for a bounced cheque due to having been away on holiday and not realizing that the account was in need of topping up!

Jeremy Williams, author of ‘Don’t they know it’s Friday’ puts it in his typically clear and succinct manner:

“Bouncing a cheque can be a criminal offence in the Gulf, not just a commercial matter.”

The UAE is not the only country where in certain instances writing a cheque against insufficient funds can be deemed to be a criminal action. Bouncing a cheque does appear to be viewed with greater seriousness in the UAE and the Gulf countries.

Anyone had any experience of this in the Gulf countries? Do write a comment if you have more to add or some point to correct.

Dr. Geoff Pound

Image: Beware bouncing cheques.