Abu Dhabi: The Central Bank of the UAE has issued a 'Consumer Protection Regulation', as the foundation of its new Financial Consumer Protection Regulatory Framework (FCPRF) to ensure fair treatment and protection of consumers.
The regulation sets out key objectives to ensure protection of consumers’ interest in their use of any financial product, service and relationship with 'Licenced Financial Institutions' (LFIs). It is supported by Decretal Federal Law No. 14 of 2018, which gave CBUAE an expanded mandate to establish regulations for the protection of customers of licensed financial institutions.
“The financial sector in the UAE is growing and expanding in terms of diverse products and services and technology, all of which are adding to the complexity of making the right decision by consumers," said Abdulhamid M. Saeed Alahmadi, Governor of CBUAE. "As a result, CBUAE has issued UAE’s first comprehensive financial consumer protection regulatory framework that defines the relationship between the financial and banking service providers and consumers to ensure the protection of financial consumers and continued confidence in the sector.”
Guidelines for LFIs
The regulation provides a broad spectrum of appropriate conduct from LFIs. It covers areas as disclosure and transparency, institutional oversight, market conduct, business conduct and protection of consumer data and privacy.
Moreover, they set responsibilities for responsible financing practices, complaint management and dispute resolutions, consumer education and awareness and financial inclusion and Shariah compliance for financial services.
“The issuance of Consumer Protection Regulation comes within the Central Bank’s keenness to promote transparency and fairness when LFIs deal with their consumers. It will enhance competitiveness, integrity and stability of the banking and financial sector,” the governor added.
These measures are designed to improve the quality of information provided by financial institutions about products and services, and provide a more efficient way of settling disputes. This includes a requirement for individual LFIs to put in place an independent and fair complaint resolution mechanism to receive and address consumer complaints.