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UAE: Up to Dh2 million fine, 2-year jail term for violating new consumer protection law

Suppliers prohibited from incorporating clauses in contracts that could harm consumers later

Published: Thu 28 Dec 2023, 2:53 PM

Updated: Thu 28 Dec 2023, 10:38 PM

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Image used for illustrative purpose. Photo: File

Image used for illustrative purpose. Photo: File

Suppliers in the UAE have been prohibited from incorporating any clauses in contracts that could harm consumers later. As per provisions of a consumer protection law that went into effect in October, consumers can seek compensation for any moral or material damages from using goods or services.

Individuals violating the new consumer protection law face up to Dh2 million in fines and 2-year imprisonment.

The new consumer protection law addresses several gaps and issues which were missing in the old one, according to legal experts.

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Federal Law No. 15 of 2020 on Consumer Protection, published in November 2020, has been supplemented by long-awaited executive regulations that became effective on October 14, 2023.

Galadari Advocates and Legal Consultants’ senior counsel Hassan Tawakalna and Paralegal Ismail Ezzat said any condition discovered in a contract, invoice, or similar document aiming to exempt the provider from their obligations is deemed invalid.

The penalties may be imposed independently or concurrently, with the possibility of doubling them in the event of repeated violations.

Key aspects of the law

>> Suppliers and commercial agents must accurately disclose all relevant information and clearly indicate the price of goods during display;

>> Goods advertising must not be misleading, and consumers must be provided with an invoice stating the price and date of purchase;

>> Suppliers must honour warranties, provide spare parts and maintenance services, replace defective goods, or refund their value in cash;

>> If supplier discovers flaws, defects, or hazards in products that may harm consumers, they must immediately notify the relevant authority immediately and remove the goods from the market;

>> In the event of product or service flaws, the supplier must offer repair, replacement, or a refund;

>> Provisions concerning repair, maintenance, or post-purchase assistance must be included in contractual agreements.

Jail, Dh200K fine for monopoly

According to the legal experts from Galadari Advocates and Legal Consultants, the previous law didn’t address the issue of monopolies, allowing suppliers to conceal goods, decline sales, or deny services to influence prices. In contrast, the recent Law No. 15 of 2020 confronts this matter head-on. “Article 19 of the new law specifically addresses monopolies and outlines the associated penalties, such as imprisonment for up to six months and fines ranging from Dh3,000 to Dh200,000. These penalties are more severe for repeated violations,” the legal expert told Khaleej Times.

E-commerce included in new law

Similarly, the old law of 2006 did not explore e-commerce or identify authorised entities in this field. In contrast, the New Law provides detailed insights into e-commerce, clearly defines individuals and entities permitted to operate in this sector.

The old law didn’t address the requirement of involving experts and laboratories in disputes between suppliers and consumers. However, Article 23 of the new law specifically states that in cases of public interest or disputes between suppliers and consumers, the ministry or competent authority has the authority to request goods or services to undergo examination by laboratories or testing facilities.

“Should the goods be deemed unsuitable, the supplier is responsible for the examination costs,” said Galdari Advocates experts.

Furthermore, the updated law introduced the principle of prohibiting goods or implementing administrative detention. According to Article 27, the minister or their representative, in collaboration with the competent authority, has the authority to issue a decision prohibiting importation, administratively detaining, or withdrawing goods from the market if they are found to be harmful or pose a risk to consumers. This provision was absent in the earlier law to safeguard consumers from hazardous products.

“Many of these penalties were not outlined in the old law, but the updated legislation has incorporated them, emphasising the commitment to safeguard consumers against fraudulent activities or deceitful practices that may hinder their purchasing or result in other forms of harm. This initiative aims to prevent potential harm to the consumer market,” said Hassan Tawakalna and Ismail Ezzat.

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