Tim Elliot: Welcome to Lawgical, the U.A.E.’s first and only legal podcast. I’m Tim Elliot. This edition, another Lawgical Lite, where we take just one specific legal case or question. Once again, I’m here at Reef Tower in the Jumeirah Lakes Towers area with Ludmila Yamalova, the Managing Partner of the Dubai-based law firm, HPL Yamalova & Plewka. Good to see you again.
Ludmila Yamalova: Good to see you too, Tim.
Tim Elliot: Now today, Ludmila, another bounced cheque scam. I’m going to let you tell the story.
Ludmila Yamalova: Sure. Even though this is called Lawgical Lite, it’s actually a fairly heavy subject because so many people have been trapped in this particular scheme. Here is the scenario. I have a car. It’s a Porsche Cayenne, for example. I think it’s probably valued around 150,000 market price. I could probably sell it at 150,000 fairly easily but I ready to sell it at $150,000 but I’m listing it $195,000 dirhams.
Tim Elliot: $195,000 dirhams.
Ludmila Yamalova: Yes, $195,000 dirhams.
Tim Elliot: Okay.
Ludmila Yamalova: I get a call from somebody named Tim. Tim says, “I’m really interested in your car and I’m ready to pay you 195,000.” Hooray. I’m very excited. I’ve got my first client and he’s not even challenging the price. You come. Later in the day you come to look at the car. It could be you. It could be you with your entourage of important or very eager looking people, and you look at the car. You say, “Yes, perfect, the car is exactly what I want, so I’m ready to pay.” Let’s go and do the transfer at what in the U.A.E. is called RTA which is the Road and Transportation Authority and does the title change, for example, and does everything to do with cars. We go and I’m very excited. You are so excited and so eager and say, “Let’s go and transfer the car now.” We go together to RTA and I do the change of ownership to you and then you give me a cheque. You give me a cheque for my 195,000. Maybe I say, “No, no, no, I don’t want a check. Sorry, I just want cash.” They say, “Come on. Have you heard Tim? I’m Tim Elliott. I am an important person. Look at me. How could you doubt me? Why would you ever doubt me? How dare you? I’ve been in this country for 50 years”, for example. You seem like a nice enough guy and trustworthy in any event. I say, “No, I’m really not comfortable with a cheque. I really want you to pay me in cash.” You say, “Listen, if it’s going to be cash it’s going to have to be later and now the banks are closed” because it’s the end of the day. Probably most likely you would come and do this on a Thursday, so Thursday, kind of late afternoon.
Tim Elliot: Okay.
Ludmila Yamalova: Then you convince me to take the cheque. “Look at me. I’m paying you the full price. I didn’t even negotiate so here is the cheque.” Perhaps maybe reluctantly, and perhaps not even so, I take it very happily because I got my 195,000 versus the 150,000 that I would have been prepared to take. I get the cheque for 195,000 dirhams and I perhaps go home or go to the bank. I deposit with the bank, but at this point we have already transferred the car because you gave me the cheque. Since it’s Thursday night and U.A.E. Friday and Saturday are the weekend, so I deposit the cheque already after business hours. I deposit the cheque and I don’t really hear anything from the bank until about perhaps either Saturday or Sunday because banks are closed on Thursday night. At that point they are closed on Friday and depending on the bank, Saturday they may not be open, and they may or may not tell me about my cheque. Most likely I will hear from the bank on Sunday. On Sunday I get a call or a get a message from the bank that the check bounced. I’m sure it’s a mistake so I call, for example, Tim. I call you back. You might answer the call and say, “Yes. It bounced? How could it be? It could not have possibly bounced. Let me try again.” I’m reassured and happy. Okay. I’ve got Tim on the line. He’s obviously a good man. He’s still there. Why would he answer otherwise? He’s so reassuring, so I go and redeposit the check and I give it another day or two. I get another message that says the cheque has bounced once again.
Tim Elliot: Um-hum.
Ludmila Yamalova: Then I am confused, and I pick up the phone and I call Tim, and the number is no longer responding or disconnected.
Tim Elliot: Okay.
Ludmila Yamalova: Now, I’m trying to find Tim. I might not have, in the flurry of activities, gotten a copy of your Emirate’s ID or your passport. Because also you were there with an entourage of people, you were all sweet talking me. Maybe I got a copy of somebody’s Emirate’s ID and passport, but when I actually look at it, it’s not yours, not the person to who I transferred. I go on a goose chasing trying to find Tim. I don’t have your home address. The passport copy or the Emirate’s ID may or may not be yours anymore. Now I’m trying to find where Tim is. Even if I have a copy of your Emirate’s ID and passport, by the time I go to the authorities and such, Tim has left the country.
Tim Elliot: And no doubt the car has been . . .
Ludmila Yamalova: I go back to the RTA and I want the car back. I need to get the car transferred. There is a way to check. For example, RTA can say, “Oh, the car has been shipped out of the U.A.E.” let’s say to Saudi or to Lebanon yesterday.
Tim Elliot: Right. Okay. At that point, a cynic would say, “You shouldn’t have accepted the cheque in the first place.” That’s your fault. These things happen. People make mistakes. What could I do?
Ludmila Yamalova: You cannot transfer the car to anyone until you get cash in your hand. That’s the short of it.
Tim Elliot: Right.
Ludmila Yamalova: The irony of it and what’s interesting is that about a year ago there were a number of people that were caught up in this scam. The scams happen fairly close to one another, but over the span of a few weeks or months.
Tim Elliot: This is an organized . . .
Ludmila Yamalova: It could have been organized. It could have been just something that became rather popular and just people were trying to jump on the wagon and benefit from it. Then recently we’ve seen a few other cases like that. What’s interesting is that one of our clients clearly refused or outright refused to take the cheque and in fact got a call from the potential buyer and said on the phone, “By the way, brother, I am taking anything in cheques. Only cash, only cash.” So even in that case of that particular client when they went to the bank, the seller said, “Yes, yes, yes, sure, sure, we can cash.” Then when they went to RTA to transfer the car, then instead of the cash, you give me a cheque. “Hang on, we agreed, we agreed that I’m not taking a cheque.” Absolutely. But throughout this short courtship, somehow in that particular case, the client ultimately was convinced to take the cheque. This is a client who clearly knew and did not want to deal with cheques, had told the prospective buyer on the phone before they showed up at his house that I’m not taking anything by form of a cheque, only cash, and even then somehow they were sweet talked into accepting the cheque. This has happened to even the more shrewd clients or shrewd people who knew the risks of cheques and somehow still fell on the sword.
At the end, what can you do? For now, the only thing that is secure is to trade ownership papers that you are signing before the RTA with cash, cash on hand. I’m holding my cash, and you are doing that, for example, in front of RTA representatives. Once I’m holding the cash, then I transfer the documents, transferring the title of the car to you. That’s really the only secure way.
Now there have been a few discussions and it would be wise to check with the authorities, but the authorities at some point contemplated to hold the car in a hold-off status for a few weeks. For example, if this happened but you, Tim, are not able to transfer the car to anyone else for the next two weeks until the two-week period lapses. In the event, for example, I run back to RTA and say, “Where is the car? I didn’t get paid for it” so the RTA still may have the option of taking the car back or re-registering the car. This particular scheme was discussed, but I’m not sure to this day if it’s available right now. Other than that, it’s just money and nothing short of it.
Tim Elliot: So it is possible to get a car out of the country, unfortunately, very, very quickly, particularly over a weekend, as you detail, so only ever take cash. What about a manager’s cheque from the bank?
Ludmila Yamalova: Great question. A manager’s cheque is something else. A manager’s cheque is akin to cash.
Tim Elliot: Right.
Ludmila Yamalova: Because in order for you to get a manager’s cheque, you need to actually have that amount of money in your bank account. On issuance of the manager’s cheque, the bank takes that money out of your account and moves it out of your account. That money is no longer in your account. You will not get a manager’s cheque unless you have that money and unless it’s already been taken out of your account by the bank and set aside for the purposes of that manager’s cheque.
Tim Elliot: That’s the thing. A sensible, reasonable buyer would say to a seller, “Look, we can go to the bank. I can get a manager’s cheque for you there” and that’s legitimate, but a personal cheque from a buyer’s account may not be, is the point.
Ludmila Yamalova: Exactly. This is why I think there are a few psychological elements that are at play. That is, the price, remember I started with the price. (1) You are offering me the price that I want, you not even trying to negotiate, you are giving me, at least in theory, a higher price. (2) You are very eager, and you want to move right away. You don’t want to take the car for inspection. You don’t want to think about it. You are there on the spot wanting to move forward, so it sounds very appealing. (3) Also, it happens on the weekend and at the end of the day. You always have the excuse of, “Listen, I would go to the bank now and I’d give you the manager’s cheque, or I’d give you the cash, but the banks are closed. But hey, I’m offering you the full price, and I’m offering it to you now.”
Tim Elliot: That is a nice way to end the week. Ticking the box of selling the car.
Ludmila Yamalova: Right. “Yes, yes, yes, yes, I definitely want to go. I would go to the bank and I would do the transfer to you either by cash or a manager’s cheque, but hey, the bank is closed. Do you want to wait until the next week or do you want to do it here and then you have money in your hand?” There are a few psychological elements at play that certainly, at least in the case of many unaware victims, they fell for it. It’s exactly that. It’s just the appearance of the person that comes perhaps or the entourage around them, the aura of importance with which they carry themselves, the assurance, the confidence, but by the same token, as you said, these were the people who obviously had either done this before a few times or were in the business of doing this, or were quite well versed in the system. Therefore, in terms of transferring the car to the next person or outside the country, they had everything lined up by that point already. It was just a matter of a few days. This is why also I used the example of sometimes when it takes a little longer, the person on the other line, i.e., Tim in this case, will hang around and will still answer the call and will entertain my concerns, assure and assuage me that I have no reason to be concerned, just to by themselves more time to make sure that the car is out of the country in sufficient time.
Tim Elliot: The advice is reasonably simple, isn’t it? Manager’s cheque, cash, and if it sounds too good to be true, it probably is.
Ludmila Yamalova: Absolutely. If it’s too good to be true, it is too good to be true. Anything that sounds just too amazing of a deal, ask yourself multiple questions. Because I will tell you at the end, recovering this is almost impossible. Why? Because even with this cheque, even if you were to file a case, first of all, it’s no longer a criminal case. Okay. It’s a civil case. You can go to the court. But if Tim, in this case, has already left the country, there’s not much you can do. Presumably, Tim has done this to a few people, done it for a reason, and so therefore, by the time you left the country you had no other assets left behind for me to try to seize. In many of these cases, even with a court judgment, and if I do go to court, I will have a judgment in my favor, whether it’s a criminal court judgment, which by the way does not give me money, only gives me a verdict against, in this case, Tim, or a civil court judgment giving me a verdict for money, but if Tim has nothing here for me to seize, then that court judgment is nothing more than that, just a court paper that I cannot really do much with. Therefore, the risks are huge, and the options are very limited. Therefore, just be wise about it and don’t rush into it. The way I think about it also in business, if you have a willing buyer and a willing seller, whether we do this deal today or in three days’ time there shouldn’t be much of a difference. You should wait and should be perfectly happy to wait to buy my car, especially when it’s about buying, right, parting with money.
Tim Elliot: A serious buyer would accommodate.
Ludmila Yamalova: Exactly, exactly. Also, when you buy an expensive car, a serious buyer perhaps would want to get it inspected at least, right.
Tim Elliot: Yes.
Ludmila Yamalova: There are a number of things that anyone should be cautious about. If somebody is just too eager and too easy, then I would ask questions and pause.
Tim Elliot: Just a couple of things, just very briefly while I’ve got you here, to do with selling cars, Ludmila. You can’t put a sign, an advert, or a sales sticker on the inside of a car stating it’s for sale in the Emirates. I know that it is against the law to do that. I just wanted you to confirm that, if you know that. Also, and I guess this is an obvious statement, you can’t sell a car in the United Arab Emirates without standing finance, a car loan that’s still due.
Ludmila Yamalova: Right. If you have a car loan, you cannot sell the car without the bank’s sign-off.
Tim Elliot: Right.
Ludmila Yamalova: The way it works is that you either have to go pay off your car loan and then get the title transferred to your name and then you are in control, or you have to ultimately have the bank representative be there on the day of the transfer so that they will have their cheque cut by the buyer and they will sign off on the title transfer. That’s basically the only way. You can’t transfer a car that has a lien on it by the bank without the bank’s knowledge. But with regards to advertising, to advertise cars most people advertise them through Dubizzle which is the U.A.E.’s online sales, peer-to-peer type of site. Dubizzle is fine. People do post signs, car for sale, but it’s not necessarily legal, but occasionally you may see a sign. Just be mindful of displaying it too prominently. The best way to do it is to do it through Dubizzle or whatever other sites, social sites as well. People do this quite regularly on Facebook community groups, they will advertise that they’re selling a car.
Tim Elliot: Finally, sell your car for cash.
Ludmila Yamalova: Yes, absolutely, unless you’re selling it to the dealer or to a company that deals with cars, then I would not accept anything other than a bank transfer before you do the transfer of title. Some people do that, or cash on hand before you sign off your ownership papers.
Tim Elliot: Ludmila Yamalova is the Managing Partner of the Dubai-based Yamalova & Plewka legal firm. A very big thank you, as always.
Ludmila Yamalova: Thank you to you, Tim, always a pleasure.
Tim Elliot: That’s it for this edition of Lawgical Lite, another look at that all too familiar phenomenon of bounced cheques and car scams. Here on Lawgical and Lawgical Lite, we try hard to offer sound legal advice from the U.A.E. every week. A reminder, once again, LYLawyers.com is always open. It’s a free-to-use legal information resource. If you have a very specific question you’d like an answer to or you’d like a consultation, get in touch by clicking Contact at LYLawyers.com or WhatsApp us, 00971 52 525 1611.
