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Out-Law News 1 min. read

UAE focuses on consumer protection with new laws


The United Arab Emirates (UAE) Central Bank has moved to enhance consumer rights in the field of financial services with a new consumer protection regulation.

The principles-based regulation came into force on 31 January. It aims to protect consumers’ interests in their use of any financial product, service and relationship with licensed financial institutions (LFIs).

The principles cover a variety of areas, including disclosure and transparency, institutional oversight, market conduct, business conduct and protection of consumer data and privacy. The principles also set responsibilities for responsible financing practices, consumer education and awareness, financial inclusion and Shariah compliance for financial services.

Firms will have to put in place independent complaints resolution mechanisms to address consumer complaints. They must also incorporate principles for responsible financing, ensuring that a customer’s financial situation is considered when determining the level of financing to be provided.

LFIs need to comply with the regulation by 31 December 2020.

The Central Bank regulation follows the publication in November 2020 of a federal law on consumer protection, which covers consumer rights for all goods and services within the UAE, including its free zones. The law means businesses will have to put more emphasis on transparency and disclosure in consumer contracts to help customers choose the most suitable product and service based on true and accurate information about the service or good offered, and its pricing.

The law requires all businesses to provide an aftercare service and repair or replace a product if a defect occurs.

E-commerce companies will have to provide more upfront information to customers about their businesses. All information provided to consumers must be in Arabic, although other languages can be used in addition to Arabic.

Commercial law expert Alexandra Aikman of Pinsent Masons, the law firm behind Out-Law, said: “The recent updates are a positive step towards ensuing consumer rights are protected across the UAE. Institutions are encouraged to audit their consumer contracts with both new and existing consumers and, where necessary, amend those contracts to bring them in to line with recent developments in the UAE's consumer protection framework.”

Aikman said the federal law and the Central Bank’s consumer protection regulation need to be interpreted together, but the Central Bank regulation will take precedence over any other regulation. However, it does not seek to reduce or modify any laws relating to financial crime such as money laundering or anti-terrorist financing.

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