The UAE have recently issued new law to provide consumers in the UAE a greater degree of consumer protection, particularly in relation to online shopping platforms (which has seen skyrocketing sales due to lockdowns and the global pandemic). This legislation will replace the Federal Consumer Protection Law No. 24 of 2006, which was the first of its kind in the country and introduced much needed regulations and guidance to consumer rights in the UAE.
What are the features of the new law?
In general, Federal Law Nr. 15 of 2020 ("New Law") is similar to the 2006 law with regards to protecting consumers' rights in that it aims to, among other rights, create a safe and suitable environment for consumers to purchase products and services, protect consumer's religious values, customs and traditions and to ensure that consumers get accurate information about that they purchase and are aware of their rights and recourse. It also provides for quick settlement of disputes, compensation for damages and generally providing a framework for suppliers with regards to how to treat consumers in a fair and legal way.
Some of the main changes in the New Law are:
- The New Law is applies to not only suppliers, vendors and advertisers in the UAE (as it was previously the case), but also to e-commerce providers. This change is especially significant following the spate of online purchasing of goods and services in recent times (resulting from the rapidly increasing digitization of shopping and services provision, accelerated by lockdowns and other pandemic-related public restrictions and individual concerns, among other things). However, the New Law does qualify that these provisions will only apply to e-commerce providers registered in the UAE. Therefore, if you need to complain about your consumer rights after buying those designer shoes from an online portal in Timbuktu (for example), this New Law will not be able to give you the recourse you are looking for. These provisions are without prejudice to any international conventions and agreements that the UAE may be part of.
- In keeping with the UAE's recent focus on data protection - for example, the new Dubai International Financial Centre data protection law (DIFC Data Protection Law Nr. 5 of 2020) issued last year and the federal healthcare data protection law (Health Data Law Nr. 2 of 2019), to name a few, and our understanding that federal data protection legislation may soon be published by the government - it is no surprise that the New Law also provides that consumer's privacy and data security need to be protected. Suppliers, providers and advertisers must ensure that no consumer data or private information is used for promotion or marketing purposes.
- Another change in the New Law is that all data, advertising and contracts relating to the consumer must be in Arabic. Other languages may be used in addition to the Arabic, but this is the supplier, provider or advertiser's prerogative. Whilst having documents and advertisements in Arabic or bilingual format is not a new concept in the UAE, the fact that it has been included in the New Law suggests that the authorities may be more vigilant on enforcement of this concept in the future.
- That brings us to the changes relating to what happens if someone does not comply with the New Law: the penalties. The New Law imposes stricter penalties on suppliers who do not comply with their obligations relating to labelling, warranties, repairing or replacing flawed or defective items, maintenance, after-sales services, providing false or misleading information about products or having terms in their contracts that may be harmful to consumers. These infringements mean that a supplier or, in the case of a corporate supplier, potentially its general manager or CEO) may incur a prison sentence of up to two years and fines of between AED 3,000 to AED 2,000,000.
For offences such as not being duly licensed, performing activities such as concealing or not selling a product for the purpose of controlling the price, adding restrictions on use of a product, requiring consumers to buy a certain quantity of the product or attempt to create a monopoly of a product in the market, non-conformance to approved specifications or public health and safety regulations or not using Arabic in its data, advertising and contracts, the penalties can be imprisonment of up to six months or a fine between AED 3,000 and AED 200,000.
These are already quite significant penalties, but if there are repeat offences, these penalties may be doubled by the authorities.
What should you do if you have a complaint?
For consumer complaints, the Department of Economic Development ("DED") in each Emirate deals with consumer protection rights violations and the implementation of the provisions of the New Law. Complaints can be made by either calling the hotline: +971600545555, downloading the relevant smart app (available at consumerrights.ae) or on the DED website at consumerrights.ae.
The concept of "buyer beware" has not yet been replaced by "the customer is always right", but the latest changes to the consumer protection landscape is definitely a leap in the right direction. Where the culture of bartering in the souks was a prime motivation for consumer to be cautious of what they are purchasing, shoppers can now head back to the souks, malls, or their computers, tablets or phones, and get shopping - safe in the knowledge that their consumer rights are protected.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.