Banking consumer protection rules require clear disclosure when free periods end. Here’s what customers are reporting, what bankers say, and how to dispute an unexpected charge
Abu Dhabi: Some bank customers have confirmed that they did not receive clear and prior notification at the end of the period of fee exemption, for their credit cards, after they obtained them as part of promotional offers that granted them an exemption for a period ranging between two and three years.
The customers said that they were surprised by the imposition of annual fees on cards, reaching up to Dh500, depending on the type of card. Two bankers stressed the importance of banks clarifying the terms of offers and the mechanism for informing the customer, stressing that both parties bear the responsibility.
In detail, bank customers reported that they were surprised to find annual fees, starting from Dh400, imposed on credit cards that they had obtained as part of promotional offers, in which the banks granted them exemption from fees for a period ranging between two and three years.
They confirmed that they did not receive clear and prior notification at the end of the exemption period and the start of the fees.
They said that they were used to using their credit cards for years without paying annual fees, which made them assume that the exemption would continue, especially since some of them did not remember that there was a specific period for the offer. Others reported that they did not notice the approaching end of the exemption period until the fee appeared in their account statement.
One customer explained that he obtained a credit card as part of a promotional offer and it included exemption from annual fees for two years. He continued to use it after the end of that period, and discovered, upon reviewing his account statement, the addition of an annual fee of about Dh400.
Fees out of the blue
Another customer said that he used his card for more than three years without annual fees, before being surprised by the imposition of a fee when renewing it. The value of the fee, according to the type of card, can reach Dh500, while for some cards it can reach higher than that. The customer pointed out that he expected to be notified before the amount was calculated, so that he could make a decision about continuing to use the card or cancelling it.
Customers stressed that their objection is not only related to the value of the fees, but also to the method of transitioning from the exemption period to imposing fees, considering that the continuation of the exemption for two or three years may reinforce in the customer the belief that no annual fees are imposed on the card, unless he/she is clearly reminded of the date of expiry of the offer, and the value of the fee that will be applied after it.
For his part, banker Mohammed Ghazi said that offers that include exemption from fees for a specific period of time do not necessarily mean that the exemption continues after the end of the period, if the card conditions clearly stipulate the return of the annual fees after the end of the offer.
He added that the main point in such cases is the clarity of the offer conditions and the mechanism for informing the customer, noting that the bank is supposed to clarify from the beginning of the banking relationship the duration of the exemption, the value of the subsequent fees, and the date on which they become due, so that the customer can make his decision based on clear information.
Ghazi explained that the presence of the fee within the fee schedule or card conditions does not negate the importance of notifying the end of the free offer period, especially when the customer has benefited from the exemption for several years, noting that prior notification reduces cases of dispute and misunderstanding between the two parties.
For his part, banker Tamer Abu Bakr stated that customers bear the responsibility of reviewing the card’s terms and conditions, account statements, and bank notifications they receive, especially since free offers are usually tied to a specific period or conditions.
He clarified that this does not diminish the importance of banks’ commitment to transparency and disclosure. The fees that will be applied after the offer ends should be clear and unambiguous, and customers should be aware in advance that the card will transition from exemption to fee-based use.
He pointed out that an amount ranging between Dh400 and Dh500 can be significant for some customers. Therefore, providing them with ample opportunity to know the fee before it becomes due enables them to compare the cost of holding the card with the benefits they receive and deciding whether to continue or cancel.
Abu Bakr added that a customer surprised by the fee can first request clarification from the bank regarding the basis for its calculation, the end date of the exemption period, whether they received prior notification, and how that notification was sent. He noted that if a settlement cannot be reached with the bank, the customer can follow the established banking complaint procedures before resorting to the competent authority for resolution.
Consumer protection rules
Banking consumer protection rules stipulate that information regarding fees and costs must be clear. They also require that when offering a product or service as free for a specific period, it must be clarified that the free period will end after that period, and the customer must be notified 30 days before being subject to the expected fees.
The rules also include requirements relating to the annual renewal of banking products, ensuring that the customer is informed in advance of the renewal date, and how to cancel or discontinue the service.
This underscores the importance of credit card promotional offers being clear from the outset, so that the customer knows the duration of the fee exemption, the value of the fee that will be applied after the offer ends, and the date on which it will be calculated.
Source: Emirates 24|7