October 3 2022 3:45 PM E-paper Subscribe Sign in My Account Sign out

Lebanon’s Depositors Union working to recover people’s money from banks

4256203704_33b3432171_c
Lebanon locked out depositors from accessing a bulk of their US dollar funds in Lebanese banks due to the financial crisis that has been ongoing since 2016. (Photo: Flickr)
BEIRUT — More than two years have passed since the financial crisis in Lebanon locked out depositors from accessing the bulk of their US dollar funds in Lebanese banks. Instead, they have received a meager monthly stipend, withdrawn in Lebanese lira at an unfavorable rate, or they were restricted to withdrawing $400 in cash each month, and another $400 in liras, also at an unfavorable rate.اضافة اعلان

The crisis and the political deadlock continue to drag on with no solution in sight for restructuring both the public debt and the banking sector. In fact, authorities are yet to quantify the exact losses sustained by the financial system, with widely varying figures being suggested.


A screenshot from the Depositors Union website. (Photo: Depositors Union)

Under these circumstances, and with the lack of responsiveness from the state, the banks, and the judiciary, the Depositors Union was set up in Lebanon as an umbrella organization to represent depositors in Lebanon and abroad.

The union’s purpose is to pursue further legal and political avenues, to put pressure on banks, bank shareholders, and politicians with the help of international donor countries to recover people’s money.


Monster bankers

“We are facing monsters. Our chances are getting slimmer and slimmer by the day,” Fouad Debs, attorney and co-founder of the Depositors Union told Jordan News regarding the fight against the Lebanese banking system and their political allies. “But there is a light at the end of the tunnel. We cannot accept that (bankers and bank shareholders and politicians) live the good life while they leave 95 percent of the Lebanese people to rot,” Debs added.

“We are the light at the end of the tunnel,” said Hady Jaafar, a journalist and PR coordinator at the union. “The activists fighting against the bankers and corrupt politicians every day are that light. It’s a risk we took, but as we see it, we have no other option. They stole our money,” Jaafar added.

Debs said that the banks are powerful and have the media and many politicians on their side. “They pay big-name journalists to defend them and have high ranking judges and civil servants on their side too,” Debs said, adding that bankers and politicians have money and property and other assets tucked away abroad.

“Our focus is on pursuing criminal cases against the banks and bankers, here and abroad. We are going to court in Switzerland, the UK, France, and in the US,” Debs said. He lamented that there is no international court for financial crimes as there is for genocide.

The Depositors Union believes that any acceptable solution to the financial situation must be based upon five basic pillars: fair cost distribution between the state, the banks and their shareholders, and depositors; public debt restructuring; inclusiveness, which is why the union is asking for a seat at the negotiating table with the International Monetary Fund (IMF) with the government and banks; transparency; and accountability.


Seeking help from the Europeans

A delegation from the union met with German Parliament members and members of the European Parliament to convince them to place sanctions on Lebanese banks and bank shareholders.

“They gave us promises that they would lobby in parliament to put sanctions (on banks),” said Jaafar but questioned whether the MPs and MEPs would actually follow through. “We didn’t get the feeling they were eager to put sanctions on banks; they didn’t seem willing to take direct action now. They seemed to be waiting for a political resolution in the region,” Jaafar said.

“We also launched a campaign aimed at the World Bank to pay the promised aid to needy Lebanese families in dollars, instead of in lira,” Jaafar said, adding that the Lebanese central bank had wanted to take the dollars and payout to families in the ever-fluctuating Lebanese lira. The union had a meeting with the World Bank’s MENA regional director, who committed not to allow payment in lira.

Jaafar said that the union is undertaking a new campaign in Europe targeting the media to explain what happened to Lebanese depositors and how their money was stolen by the banks.

Debs said they have visited several European embassies in Lebanon and urged them to put certain Lebanese bankers and politicians on a watchlist or place sanctions against them. “Our campaign is similar to the Palestinian’s Boycott, Divestment, Sanctions (BDS) campaign, in that we urge countries not to deal with these people anymore,” he said.  


Fraudulent maneuvers 

Since 2016, approximately, Lebanese banks had been intensifying their targeting of Lebanese living in the diaspora, trying to collect as many deposits from them as they could. “The (financial) crisis started in 2016, but the public did not know of it. The media campaign at the time was pumping up the reputations of the banks and (Central Bank Governor Riad) Salameh. The Americans gave him an award. Banks went to the four corners of the world to convince the Lebanese abroad to put their money with them,” Debs said.

He said that some banks made depositors sign up for credit-linked deposits, which meant that banks would decide if they returned depositors’ money as Eurobonds, central bank certificates of deposit (CDs), or cash.

“Banks were pushing people to get these products (bonds, CD’s) instead of cash deposits, to make it harder to return the money. The basis was fraud, (the banks) knew what was going on, these were fraudulent maneuvers,” Debs said, adding that all the ads in the media, the banks paying experts to say what they wanted people to hear so that banks could get more and more deposits.

Debs said that in the EU, the above practice is considered a crime according to their consumer protection law, and in fact, one Lebanese bank was ordered by a French court to pay a depositor his money back after he had filed suit against the bank. But, Debs warned that it’s not as easy as all that as some lawsuits have failed.

Debs also said that they realize how powerful the banks are, which is why lobbying governments abroad is so important, especially from the Lebanese diaspora. He said that the Association of Banks in Lebanon has near-total impunity.

Read more Region and World