The Central Bank issues a new system for consumer protection
The Central Bank of the United Arab Emirates issued the Consumer Protection Law as a basis for the new regulatory framework for financial consumer protection, which aims to ensure fair treatment and consumer protection.
The new system is based on Federal Decree-Law No. (14) of 2018 regarding the Central Bank and the Organization of Financial Facilities and Activities, which gave the Central Bank an expanded mandate to set regulations and standards to protect clients of licensed financial institutions.
The system, which is based on detailed principles, sets out a number of key objectives to ensure that consumers' interests are protected when they use any financial product or service or in their relationships with licensed financial institutions.
The system provides a wide range of sound behaviors expected of licensed financial institutions.
The principles of the system include various areas such as disclosure, transparency, institutional control, market and business behavior, and consumer data protection and privacy.
In addition, the Principles specify responsibilities for responsible financing practices, complaints management, dispute resolution, consumer education and awareness, financial inclusion, and compliance with Islamic Sharia provisions related to financial services.
The regulatory principles were supported by detailed standards that will ensure the consistent application of these principles for licensed financial institutions and act with integrity and fairness in the treatment of financial consumers.
Commenting on the issue, the Governor of the Central Bank of the United Arab Emirates, Abdul Hamid Muhammad Saeed Al-Ahmadi, said: “The growth and expansion of the financial sector in the UAE in terms of the multiplicity of products and services and the development of technology contribute to increasing the complexity of making the right decision by consumers. The Central Bank issued the first comprehensive regulatory framework defining the relationship between providers and consumers of financial and banking services and products, in order to ensure financial consumer protection and the continuity of confidence in the sector.
He added: "The issuance of the consumer protection system comes within the Central Bank's keenness to enhance transparency and fairness in the dealings of licensed financial institutions with their customers, which enhances the competitiveness and integrity of the banking and financial sector and contributes to its stability."
These procedures are designed with the aim of improving the quality of information provided by financial institutions about products and services and providing a more effective and efficient way to settle disputes, including the requirement for each licensed financial institution to establish an independent and fair mechanism for settling complaints that would receive and address consumer complaints.
It also takes into account consumers' financial situation, so that licensed financial institutions must adopt principles of responsible financing to determine the appropriate level of consumer lending.
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