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Awatif Mohammad Shoqi Advocates & Legal Consultancy

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New Telemarketing Rules and Regulations in the UAE: A Comprehensive Guide to Fines and Enforcement

Introduction:

Effective August 27, 2024, new telemarketing regulations in the UAE will come into effect under Cabinet Decision No. 56/2024. This new law aims to refurbish the way telemarketing is conducted, focusing on protecting consumers from unwanted calls and ensuring ethical practices within the industry. In addition, with this, Cabinet Decision No. 57/2024 introduces a detailed background for administrative penalties related with violations of these new rules. This article provides a detailed overview of the new regulations, including the full list of fines and enforcement measures.

Key Provisions of Cabinet Decision No. 56/2024

Cabinet Decision No. 56/2024 establishes a structured framework for telemarketing activities within the UAE. Article 1 defines telemarketing phone calls as calls made by a company or an individual for marketing, advertising, or promoting products or services, including marketing SMS and social media messages. It also introduces the Do Not Call Register (DNCR), a national list managed by the Authority to protect consumers from unsolicited calls. Article 2 outlines the primary goals of the regulation: to organize telemarketing activities, support economic and social stability, and reduce unwanted calls, thereby safeguarding consumer privacy.

Article 3 extends the regulation's applicability to all UAE-licensed companies, including those in free zones, and prohibits individuals from conducting telemarketing without appropriate licensing. Article 4 specifies companies' obligations, including obtaining prior approval for telemarketing, using local registered phone numbers, maintaining records of calls, and respecting the DNCR. Companies must also provide training on ethical marketing practices and adhere to specific calling hours.

Article 5 imposes controls on telemarketing practices to prevent unethical behaviour. This includes prohibiting unfair pressure or misleading tactics, restricting calls to within specified hours (9:00 am to 6:00 pm) and avoid calling numbers listed in the DNCR, and limiting follow-up calls. Article 6 emphasizes consumer protection, allowing consumers to file complaints, register in the DNCR, and expect their personal data to remain confidential. Article 7 defines the penalties for violations, which can range from warnings to license cancellation, depending on the severity of the violation.

Article 8 emphasises the cooperative efforts of various authorities to enforce these regulations and educate both consumers and companies. Article 9 details the competencies of the Ministry, Central Bank, Securities and Commodities Authority, and local authorities in overseeing telemarketing activities. Finally, Article 10 grants the Minister the authority to issue additional decisions to address any attempts to avoid the regulations.

Administrative Penalties Under Cabinet Decision No. 57/2024

Cabinet Decision No. 57/2024 introduces administrative penalties for telemarketing violations, applicable to both companies and individuals, including warnings, fines, and potential suspension or cancellation of licenses for companies, while individuals may face fines and restrictions. Fines can be adjusted through proposals coordinated with relevant authorities, and federal authorities or the Central Bank are responsible for fine collection. The grievance process allows affected parties to file complaints within 15 days of receiving a notice, with decisions made within 30 days.

The Penalties for Specific Violations Include:

  • Failure to Obtain Prior Approval: Companies that engage in telemarketing without prior approval face escalating fines: AED 75,000 for the first offence, AED 100,000 for the second, and AED 150,000 for the third, as outlined in Article 4/1.

  • Inadequate Training for Marketers: Companies that do not provide comprehensive training on professional conduct and the DNCR face fines of AED 10,000 for the first offence, AED 25,000 for the second, and AED 50,000 for the third, as detailed in Article 4/2.

  • Telemarketing from Unregistered Numbers: Using unregistered numbers incurs fines of AED 25,000 for the first violation, AED 50,000 for the second, and AED 75,000 for the third, according to Article 4/3.

  • Contacting Numbers on the DNCR: Contacting consumers listed in the DNCR results in fines of AED 50,000 for the first violation, AED 75,000 for the second, and AED 150,000 for the third, as specified in Article 4/5.

  • Record-Keeping Failures: Companies failing to maintain and submit records of telemarketing calls face fines of AED 10,000 for the first violation, AED 25,000 for the second, and AED 50,000 for the third, as stated in Articles 4/6 and 4/8. Similarly, failure to record calls or notify consumers about recordings incurs fines of AED 10,000 for the first time, AED 20,000 for the second, and AED 30,000 for the third violation, according to Article 4/7.

  • Introduction and Disclosure Failures: Fines for failing to introduce the company and purpose of the call or disclose the source of phone numbers range from AED 10,000 for the first violation to AED 30,000 for the third, as outlined in Articles 4/11 and 4/12.

  • Unethical Marketing Practices: Fines for using aggressive tactics, deception, or making calls outside permitted hours range from AED 10,000 to AED 75,000, depending on the nature and frequency of the violation, as described in Articles 5/1 to 5/6.

  • Excessive Follow-up Calls: Calling back consumers excessively or using automated systems improperly incurs fines ranging from AED 10,000 to AED 50,000, as outlined in Articles 5/4 and 5/5.

  • Disclosure of Personal Data: Disclosing or trading consumer data without consent incurs severe penalties, starting at AED 50,000 for the first offence and increasing to AED 150,000 for subsequent violations, according to Article 6/4.

    • Additionally, individuals making marketing calls may face penalties. First-time offenders may face a fine of AED 5,000 and suspension of their phone numbers until the fine is paid. Repeat offences within 30 days may result in a fine of AED 20,000 and a three-month suspension. A third offence may lead to a fine of AED 50,000 and a 12-month ban on obtaining telecommunication services, as per Article 3/2.

    Conclusion:

    Both companies and individuals involved in telemarketing should thoroughly familiarize themselves with these regulations to avoid significant fines and penalties. Compliance with these rules will not only help avoid legal consequences but also contribute to a more consumer-friendly marketing environment.

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