UAE Central Bank makes cold calls from banks and financial consultants illegal

The next time you get a cold call from a bank or financial consultant in the UAE you should report them to the Central Bank. For under new regulations issued on Sunday they will be fined and kept under watch to make sure they stop doing this now illegal activity.

A Central Bank spokesperson told The National that unsolicited phone calls were ‘causing such customers a lot of disturbances, which also gives a negative impression about the status of UAE banks’.

Intrusive marketing

ArabianMoney has been campaigning for just such a ban on cold calls for a long time (click here). Quite apart from the intrusion into daily life by the bona fide local banks, there are the many so-called financial advisers who try to entrap newly arrived expatriates into dubious financial investments or savings plans with excessively high fees.

Many are tricked into believing that these are all regulated by the UAE Central Bank when many are not. Putting a ban on the phone calls that are often the beginning of such disastrous business relationships is a step forward, and brings the Emirates into line with global best practice.

It will also help prevent current abuses by the major global banks. For example, if a Russian lady banker leaves HSBC in the UAE and goes to Barclays and then proceeds to call a list of her old clients to try to persuade them to move bank, she would also now be committing an offence.

Regulation plea

However, it would be even better if the whole industry was more tightly regulated so that the public could have more confidence in its services.

Even self-regulation by international banks leads to overcharging for fees, although the bank is at least a safe custodian. That may not be the case for the third parties recommended by some financial advisers.

Always ask who ultimately holds your money? Can you rely on them? Will you get your money back, and what sort of guarantee do you have for that promised return on your investment?

It is sad but true that some expatriates and for that matter UAE nationals still fall prey to dodgy operators. That they will not be able to approach either by unsolicited phone calls is a happy day for honest financial consultants. It may attract more of them to set up in the UAE and will make it harder for their dishonest cousins.