Steer clear of the hard sell in the UAE

Few of us manage to avoid nuisance phone calls from banks where salespeople try to talk you into taking the plunge on a financial product you just don’t need. But here’s how to head the cowboys off at the pass, Harvey Jones writes

Anna Lucas, customer marketing manager at propertyfinder.ae. She is so tired of the hard selling tactics adopted by UAE and international banks that she is now reluctant to pick up the telephone. JaiShow more

Anna Lucas is so tired of the hard-selling tactics adopted by UAE and international banks that she is now reluctant to pick up the telephone. “I get constant calls offering loans and credit cards, often on a daily basis. I no longer answer my phone if it’s an unknown number.”

Ms Lucas, 28, is not alone. Once you end up on a bank or insurer’s telemarketing list, the unsolicited calls keep flowing, despite an official ban by the UAE Central Bank in March 2011.

As the UAE economy recovers from years of stagnation, the fight for retail customers has intensified in the banking community. As a result, commission-hungry salesmen desperately try to lure new customers with offers for credit or talk consumers into meeting one of their agents, where the hard sell will only intensify.

Typically, they might ask you to convert credit card transactions to instalment plans, or offer to transform the remaining credit on your card balance into an instant loan.

Nobody likes having their day interrupted by an unsolicited sales call. But the cowboys dial your number anyway in a bid to sell you credit cards, loans and insurance.

Some consumers even complain of sales staff begging them to sign up for a product, saying they won’t receive any commission unless they do.

Given the risks involved in taking on unaffordable credit in the UAE, this really is a case of stranger danger.

Ms Lucas, a customer manager who comes from Wales and has lived in Dubai for nearly three years, would rather make her own decisions on how to borrow money. “If I’m interested in obtaining credit in any form, whether a mortgage, car loan or credit card, I visit comparison sites.

“That allows you to compare policies like-for-like on one platform, without having to contact a number of banks or visit a string of websites. And it is far better than being talked into buying something over the phone. If more people did this, the cold calling will eventually stop.”

Banks wouldn’t spend so much time and effort on telemarketing if it didn’t work with at least a proportion of their customer base, says Samer Chehab, commercial director at the price comparison site compareit4me.com. “The offer of quick cash can seem very appealing but you should always fully research the market before applying for any type of financial product,” he says.

Making a large financial commitment on the basis of one telephone call is risky, Mr Chehab adds. “Given the complexities of financial products, a quick call isn’t enough to make a decision on any form of finance. There’s a huge array of loans and credit cards available in the UAE. Each have different strengths and weaknesses so it’s vital you take time to consider your options.”

When the cowboys call, you can demand to be scrubbed from their mailing list, usually to little avail. Instead, you have to firmly but politely say no, then do some research to find what really is the right product for you.

Banks use various techniques to sell their products, says Preeti Harrison Bhambri, managing director at another comparison site, MoneyCamel.com. “The most common is cross-selling to their existing client base. That’s why it’s so common to receive calls suggesting you turn your existing credit card into a loan.”

Banks constantly need fresh databases for telecalling, she says: “Call centre executives are heavily incentivised to make sales and constantly try to obtain new databases. The property owners’ database is popular. There have even been cases of employees selling their company’s database to outsiders for a handsome sum.

“Banks also use legal means such as lucky draws, contests and freebies to collect databases at places with heavy footfall such as supermarkets and gas stations,” Ms Bhambri adds.

To complicate matters, banks can sometimes offer attractive deals. “Say you are borrowing money on a credit card charging 2.99 per cent a month. If you were offered the chance to convert the outstanding balance into a loan charging 9 per cent a year, it would force you to close the card, and give you a substantially lower interest rate.” says Ms Bhambri.

A genuine product promotion should give you an interest rate rebate, cut your processing fees or offer you a substantial introductory gift Ms Bhambri says, adding that too many banks are guilty of passing off easy credit at a high interest rate. “Some of the worst deals persuade you to postpone payments at a seemingly small cost. They might sell you, say, a credit card charging 0 per cent for the first six months, but you pay a hefty interest rate once that introductory rate has expired.”

As telemarketers are randomly cold calling you from a list on their database, it’s unlikely that the product on offer is the right one for you.

Instead Ms Bhambri advises comparing rates and fees, and reading the fine print on the product detail page. “If you can find newspaper or user reviews online, that will also help,” says Ms Bhambri adding that consumers should also review existing credit lines to make sure they still offer the best rate. Especially if you took out your loan when interest rates were higher.

Sunil Joshua, 37, a senior manager at Etihad Airways, and his wife Trupti Kothari, 36, took out their Dh1 million mortgage four years ago. The married couple, who have lived in the UAE for more than a decade, were paying 7.8 per cent a year, but realised there were far better deals out there today.

“We had heard that rates had come down, so we decided to explore this a bit more,” says Mrs Kothari, a former employee of Dubai First, now at home raising their daughter Anya, aged five.

The couple wanted a deal that was right for them, rather than something pushed their way by the telemarketers. “Since we were both really busy at work and looking after our toddler, we had no time to visit the branch or call all the banks,” says Mrs Kothari.

A friend recommended they use the loan comparison calculator on MoneyCamel.com to find a better deal. “We got all the rates, used their free calculators, and found a loan charging just 5.5 per cent. Switching to that will save us a whopping Dh131,606,” adds Mrs Kothari.

They applied online, and their new bank called them back to set up the loan. But this was an arranged call, for a product they knew they wanted, rather than a random call from a cowboy. And that’s how it should be.