UAE introduces a new car rental payment rules circular to ensure fair practices

The Dubai Corporation for Consumer Protection and Fair Trade under the Department of Economy and Tourism has instructed car rental companies to promptly return deposits, including those held on credit cards, within a 30-day period following the vehicle's return.

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The Department of Economy and Tourism's Dubai Corporation for Consumer Protection and Fair Trade issued this directive, emphasizing adherence to relevant laws, regulations, and guidelines regarding deposit commitments.

Disseminated to all car rental entities in the emirate, the circular emphasizes the importance of safeguarding consumer rights and fostering mutual benefit between consumers and rental agencies. It stipulates that if a consumer lacks a credit card, the rental office must accept the security deposit in cash or via debit card, explicitly prohibiting the processing of credit card security holds as purchase transactions.

Ahmed Ali Mousa, director of consumer protection at the Department of Economy and Tourism in Dubai, elucidated that the core objective of the circular is to ensure compliance with regulatory frameworks pertaining to security deposits, reiterating the obligation of rental firms to adhere to relevant laws and guidelines.

Under Circular No. 1 of 2024, if a customer submits a security deposit in cash or via debit card, the rental office must refund it either in cash or through a bank transfer, with the associated transaction fee borne by the rental company. However, deductions for traffic violations, vehicle damages during the rental period, and administrative charges are permissible from the security deposit.

Moreover, the circular explicitly prohibits the imposition of surcharges or transaction fees for credit card or payment application usage. Mousa emphasized that car rental companies are restricted from levying additional charges beyond administrative fees, except for ancillary services such as car washing and Salik charges, which must be transparently communicated to consumers.

In summary, the directive aims to ensure timely and transparent handling of security deposits by car rental companies, fostering consumer confidence and compliance with regulatory standards while promoting fair and equitable practices within the industry.

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