Legal and banking experts in the UAE have warned that incorrectly selecting the “Family Support” option when transferring money could lead to future financial disputes, difficulties recovering funds and requests for further information from banks.

Some customers select “Family Support” when transferring money to friends or paying for goods and services simply to save time, even though the description does not match the transaction’s actual purpose.

Potential difficulties recovering funds

Asawer Khamis Al Mansouri, a lawyer and legal consultant, said recording an incorrect purpose for a transfer could become significant in the event of a financial dispute.

For example, if someone transfers money to a friend as a loan but selects “Family Support”, they may have difficulty proving their claim when seeking repayment.

She said a bank receipt only confirms that money was transferred between two accounts and does not necessarily prove whether the payment was a loan, a gift or the settlement of a debt.

However, the description recorded for the transaction is not conclusive evidence, and a court will consider it alongside contracts, correspondence and other documents.

Does selecting the wrong option constitute money laundering?

Al Mansouri stressed that selecting an incorrect transfer purpose does not in itself constitute money laundering.

However, if the transaction is linked to unusual activity or individuals under financial investigation, any discrepancy between the recorded information and the payment’s actual purpose could prompt requests for further explanations and documentation.

Abdullah Al Harbi, a legal consultant, also advised customers not to select “Family Support” merely for convenience and speed, and to record the transfer’s actual purpose.

Which option should be used for money transfers?

Amjad Nasr, a financial consultant and banking expert, said the “Family Support” option is appropriate for transfers to family members intended to cover living expenses.

However, for vehicle purchases, rent payments, debt settlements, tuition fees, medical expenses or personal loans, customers should select an option that reflects the transaction’s actual nature.

He suggested that banks allow customers to provide additional details about the reason for a transfer when no suitable option is available.

Experts also advised customers to retain contracts, receipts and correspondence related to money transfers so they can demonstrate the payment’s actual purpose in the event of a dispute or a request for clarification from the bank.