When Khabarani approached the bank, he learned that he had defaulted on two installments. The bank then asked him to pay SR1,500 in fine in addition to the outstanding installments as well as the towing charge.
The bank official showed him the contract, which has specified the bank’s right to tow the vehicle if the client failed to pay three installments in a row.
“I asked the official why they had towed my car as I had delayed only two installments, not three as mentioned in the contract, but he had no reply,” Khabarani said.
Majed Abdullah also said his car was towed away for not paying two installments. He used to pay SR1,500 instead of SR1,400, which was the amount mentioned in the contract.
He said his car was damaged while towing and its repair cost was estimated at SR15,000, including the price of spare parts. “I also lost SR25,000, which I had kept in the car,” he added.
“When I informed the bank about the damage and the theft of money, it said it was not responsible for such losses,” Abdullah told Al-Madina.
Abdul Kareem Al-Zahrani narrated a similar story. His car was towed away on the instructions of an installment company without his permission or knowledge.
Mohammed Omar said the bank had towed away his car for a second time without informing him even though he had paid the delayed installment and a fine.
Lawyers insist that banks have no legal right to tow away cars for default on installments. Bank officials, however, claimed that they have the right to impound cars on the basis of contracts signed with the clients if the latter fail to pay installments.
Lawyer Khaled Aburashid, who is a legal consultant, said banks have no right to seize vehicles for not paying installments except through security agencies.
“Customers can take legal action against the banks or the concerned officials by filing lawsuits at the criminal court for towing away cars. If convicted the official responsible will be jailed for two weeks and given 150 lashes,” he said while explaining the law.
(Source credit – Saudi Gazette)