An overview of Executive Regulations of Federal Law No. 15 of 2020 on Consumer Protection
Federal Cabinet Resolution No. 66 of 2023 concerning the executive regulations of Federal Law No. 5 of 2020 on consumer protection (the Regulations) was recently issued by the government of the United Arab Emirates (UAE) and came into effect on 14 October 2023.
These Regulations provide clarity on the scope of the requirements and restrictions outlined under the previous law, i.e., Federal Law No. 5 of 2020 (Consumer Protection Law). The Regulations also introduce some new and important elements and processes for the protection of consumers.
For the purpose of this article, provider means any legal person who offers a service or a commodity to the consumer or who is dealt with or contracted in this regard.
The most important features of the law are set out below.
1. Harmful terms to the consumer
The Regulations detail a list of terms and conditions which may be considered detrimental to the customer’s interests, including:
- giving the provider the right to interpret or amend some of the contract clauses unilaterally;
- authorising the provider to terminate the contract unilaterally;
- cancelling the customer’s right to claim a compensation when the provider breaches its obligations; and
- not refunding the price of the goods or services to the customer, amongst others.
It is now clarified that such conditions will be null and void whether provided under any contract, invoice, documents, or any other manner related to contracting with the consumer, such as fine prints.
2. Labelling and invoicing
Article 3 of the Regulations also stipulates what information must be included on the packaging of goods, and the place where it should be displayed. This will depend on the nature of the goods, components, country of origin, production date and shelf life, conditions of storage and method of use, and determination of the categories and ages of consumers who may be exposed to risks when using the product, especially children, the disabled, and the elderly.
In addition, there are also strict requirements related to how invoices are to be provided to consumers, and the information that is to be included.
3. Used or refurbished goods
Providers of used, refurbished or defective goods are required to conform to certain specific standards under the Regulations. They need to clearly announce the condition of the goods in a manner that does not create an untrue or misleading impression on the consumer, and they need to include the same information in the contract and invoice.
4. Misleading advertisement
Article 8 of the Regulations sets out that a good or service description will be deemed deceptive if it includes a misleading statement related to the nature of goods, country of origin, intellectual property, etc., that may create an unrealistic impression of the good or service.
The Regulations prescribe a fine up to AED 250,000 for such misleading descriptions.
Providers must provide warranty documentation upfront, including the warranty period (commensurate with the nature of the good or rendered service or the duration agreed upon with the consumer, whichever is longer).
The Regulations also set out an obligation for providers to maintain an adequate after-sales service and offer consumers spare parts where required within specified time limits. For such provision, businesses will need to maintain a written mechanism in Arabic and make it accessible for consumers.
6. Prices – increased consumer rights
The Regulations provide that businesses must announce the prices of goods and services in a clear and legible manner. They must also explicitly indicate if they accept discount cards from consumers as well as the value of any such discounts. It is also prohibited to add additional amounts to the value of the goods when consumers use credit cards to pay for them.
The providers should also notify the consumer of any discounts to be made on the goods or services within a week from the date of the consumer’s purchase. In case this obligation is violated, the consumer shall have the right to recover the price difference within thirty (30) days from the date of purchase.
Article 9 of the Regulations also states that temporary measures may be taken upon a resolution of the Ministry of Economy in the event of a crisis or unusual circumstances leading to an abnormal increase in prices. The inflation rate, price range in the country, foreign exchange rates and high energy prices will be taken into account in such a scenario.
7. Consumer complaints
The form in which consumer complaints are to be submitted is described in Article 35 of the Regulations. The competent authority shall study the complaint and respond to the complainant within the period determined according to the nature of the complaint.
The Regulations set out several obligations on the providers of products or services via e-commerce platforms in the UAE.
Article 40 of the Regulations prescribes what information needs to be presented to consumers and also the format in which such information needs to be presented, subject to the nature of the goods, the basic data stipulated in the rules, laws, technical regulations and approved standards.
Moreover, the Regulations also state that the e-commerce platform providers will bear responsibility for any defect in the goods when a third party uses their platform for sale.