Financial Mis-selling in the UAE: Banks, Advisers & Wealth Managers

Part of Banking & Financial Disputes: UAE & India – the overview that links the banking-recovery and mis-selling guides across the UAE and India.

Mis-selling is the sale of a financial product that was unsuitable, inadequately disclosed or misrepresented – not simply an investment that lost money. In the UAE the conduct rules sit mainly in three places: the Central Bank (CBUAE) for onshore banks and insurers; the DFSA in the DIFC; and the FSRA in ADGM (with the securities and virtual-asset regulators engaged for some products). The single most important question is usually whether you were treated as a retail or a professional client, because that decides what protection applied. Complaints run first to the institution, then to the Sanadak ombudsman, with the onshore, DIFC or ADGM courts for larger or contested claims. This page explains the legal substance – it is not a promise of recovery.

Financial mis-selling in the UAE at a glance

• What it is – unsuitability, non-disclosure, misrepresentation or churning, judged on conduct at the point of sale, not on hindsight
• Conduct regimes – CBUAE (onshore banks and insurers), DFSA (DIFC), FSRA (ADGM); securities and virtual assets can also engage the CMA or VARA
• The pivotal question – retail vs professional client; suitability duties and protection turn on it
• Insurance reform – Board Decision No. 49 of 2019 (as amended): a minimum 30-day free-look, commission controls and prescribed illustration and disclosure requirements
• Complaint route – the institution first, then Sanadak; further review through the relevant Sanadak committee or the courts
• Forums – onshore civil courts, the DIFC Courts, the ADGM Courts, or arbitration; insurance-related claims carry a short limitation period
• Cross-border – expatriates and NRIs sold offshore products in the UAE: which law, which forum, and how a judgment is enforced

Immediate steps if you suspect mis-selling

• Preserve everything – keep the sales file, illustrations, statements, emails and messages; do not delete anything.
• Do not surrender or settle a policy, or sign a release, before taking advice – it can reduce or extinguish a claim.
• Ask for the file – request the suitability assessment, risk profile and classification records in writing.
• Complain in writing – putting the complaint on the record also starts the clock on the institution’s response.
• Check the time limits – the free-look window and the limitation period can be short; act before they pass.

This is general guidance, not advice on a specific case.

1. What counts as mis-selling – and what does not

A losing investment is not, by itself, mis-selling. Mis-selling is a failure in how a product was sold. The recurring categories are a product unsuitable for the client’s objectives, risk appetite or circumstances; inadequate or misleading disclosure of risks, charges, lock-ins or commissions; misrepresentation of returns, guarantees or liquidity; churning – trading or switching to generate commission; and selling by an unlicensed person or through an unapproved promotion. The test looks at the point of sale – what the client was told, what they were asked, and what they were given – not at whether the market later moved against them. That distinction separates a claim from buyer’s remorse, and it is where most cases are won or lost.

2. The products where it happens

Mis-selling clusters around complex, high-commission products. The most common in the UAE is the investment-linked life “savings” plan – a long-term, regular-premium policy with front-loaded charges, surrender penalties and opaque commissions, often marketed to expatriates as flexible savings. Others include portfolio bonds and offshore wrapper products, structured notes, leveraged foreign-exchange and CFD trading, discretionary or advisory portfolios run outside the client’s mandate, and credit and insurance sold as a bundle. Two further categories matter for higher-value clients: transfers of UK and other overseas pensions – into QROPS or international SIPPs, frequently wrapped inside an offshore bond that adds a further layer of charges – and complex FX, interest-rate or structured-derivative hedges, often on ISDA terms, sold to companies and SMEs whose underlying need was to manage an ordinary commercial risk. Virtual-asset products and unauthorised crypto promotions are a more recent addition. The common thread is a product whose costs and risks are difficult to see and whose commission to the seller is high – which is precisely where suitability and disclosure duties matter most.

3. Who sets the conduct rules

The UAE has three conduct perimeters. Onshore, the Central Bank (CBUAE) regulates banks and – since 2020 – insurers, now under the consolidated Central Bank Law (Federal Decree-Law No. 6 of 2025, in force 16 September 2025), which governs financial institutions and insurance business outside the DIFC and ADGM free zones. Its Consumer Protection Regulation and the binding Consumer Protection Standards require fair treatment, suitability, clear disclosure and proper complaint-handling, and the CBUAE’s SME conduct framework restricts financial institutions from limiting customer choice through practices such as tied selling and bundling of financial products or services. For life and investment-linked policies, Board Decision No. 49 of 2019, as amended, introduced a minimum 30-day free-look period, commission controls and prescribed illustration and disclosure requirements. In the DIFC the DFSA‘s Conduct of Business rules apply; in ADGM, the FSRA‘s. Which regime governs depends on where the firm and the booking sit – a threshold question in every cross-border file. Two further perimeters can apply depending on the product: onshore securities activity falls to the Capital Market Authority (CMA), which took over the former Securities and Commodities Authority’s role from 1 January 2026, and virtual assets to Dubai’s VARA alongside the federal framework – so a securities or crypto promotion may engage a regulator beyond the CBUAE, DFSA and FSRA.

4. The pivotal question – retail or professional client?

In the DIFC and ADGM, and in substance onshore, a firm must classify a client before it sells: retail client, professional client or market counterparty. That classification decides what follows. A retail client receives the full suite of protections – a suitability assessment, enhanced disclosure, and access to the complaints process. A professional client is assumed to understand the risks and receives far less. Many mis-selling claims by wealthy individuals turn on a single point: they were “opted up” to professional status – sometimes on a form they barely registered – which can remove much of the suitability protection they should have had. Whether that opt-up was valid, properly explained and adequately evidenced is frequently the heart of the case. Age, inexperience or limited financial literacy strengthen that challenge – the protection is meant to track the client’s real sophistication, not the box that was ticked. A common pattern is the high-net-worth individual opted up to professional status on a one-page form who in fact had limited investment experience and was relying on a relationship manager’s advice – facts that can support a challenge to the classification.

5. Complaining – the institution first, then Sanadak

The first step is a formal written complaint to the institution itself; onshore, the customer generally gives it up to 30 calendar days to respond before the matter can be escalated. If it is unresolved, an eligible complaint may be referred to Sanadak, the Central Bank’s independent ombudsman – the first in the region – which is free for consumers. Sanadak investigates and issues a determination; determinations are subject to the review, appeal and enforcement framework applicable to the particular type of financial or insurance complaint, and any applicable review deadline should be checked promptly. Depending on the nature of the complaint, further review may be available through the relevant Sanadak committee or the courts. In the DIFC and ADGM, a client complains to the firm and then to the DFSA or FSRA: the regulators can investigate and sanction firms and, in appropriate enforcement cases, seek or require restitution or compensation – but they are not a forum for an individual damages claim. For money back, the practical route is the applicable complaints process, the ombudsman where available, or the courts.

6. The forums – Sanadak, the courts and arbitration

Where a claim is too large for the ombudsman, or needs a binding judgment, it goes to court. Onshore, that is the civil court of the relevant emirate, applying UAE law. In the financial free zones it is the common-law DIFC Courts or ADGM Courts, applying their own rules – often the better forum for a sophisticated, document-heavy suitability claim. A mis-selling claim is frequently raised in answer to a bank’s recovery action. Some advisory or account agreements contain an arbitration clause, which fixes the forum and the seat. Choosing the right door – ombudsman, which court, or arbitration – is a legal decision in itself: it affects cost, speed, privacy, the remedies available, and how a judgment is later enforced against the institution or adviser.

7. Building a claim – suitability, disclosure and time limits

A mis-selling claim is documentary. It is built from the fact-find and risk profile the adviser took – or failed to take – the suitability assessment, the disclosure documents and the policy illustration, the marketing that was used, and the gap between what was said and what was signed. The questions are concrete: was the product suitable on the recorded facts; were the charges, lock-ins and risks disclosed clearly; was the adviser licensed and the promotion approved; and what loss flowed from the breach. Timing matters. UAE onshore claims now fall under the new Civil Transactions Law (Federal Decree-Law No. 25 of 2025, in force 1 June 2026), which modernised the limitation rules; insurance-related claims, and ordinary contractual or tortious claims, run on different periods, and the DIFC and ADGM apply their own limitation regimes. In a cross-border file the limitation question can also turn on the governing law of the policy or advisory contract. Because the period and its start date can be arguable – and can be short for a long-term policy – the limitation position should be identified before the first complaint is filed.

The documents that matter. A claim is usually built from the fact-find and risk profile; the suitability or needs-analysis report; KYC and client-classification forms; the product proposal, illustration and policy schedule; account and valuation statements and the surrender value; commission and fee disclosures; the marketing material; the sales correspondence, including emails and messaging; and the complaint history. Preserving these early – before anything is surrendered or settled – is often decisive.

8. What actually decides a mis-selling claim

Beyond the headline question of suitability, a handful of points tend to decide these cases – and they are where experienced judgment matters most. These principles are most developed in the common-law DIFC and ADGM courts; onshore, the civil-law analysis differs in form, though the same underlying concerns – suitability, disclosure and genuine consent – run through every UAE forum.

Advice, information or execution-only. The duty owed depends on what the firm actually did, not the label on the account. A relationship manager who holds themselves out as advising the client can owe an advisory duty even where the paperwork says “execution-only”; a genuine execution-only relationship carries no duty to advise. What was said and held out at the start of the relationship can matter as much as what was later signed.

“Non-reliance” and “basis” clauses. Account documents often record that the client is not relying on the firm’s advice, is exercising their own judgment, or is dealing execution-only. These clauses are a real hurdle – but not an absolute one. They can be set aside where they are unreasonable or unconscionable, or where they do not reflect what actually happened, and they are harder to enforce against an unsophisticated or vulnerable client. A signature is the start of the argument, not the end of it.

Risk-profile mismatch. A documented gap between the client’s recorded objectives and risk appetite and the risk of what they were actually sold is powerful evidence of unsuitability – particularly where a client recorded as cautious was placed in leveraged or illiquid products.

Disclosure versus understanding. A signed risk warning is not conclusive. The question is whether the client was genuinely made aware of the material risks, judged against the regulator’s conduct rules – a stack of disclaimers does not cure advice the client was never in a position to understand.

Causation. That a loss crystallised in a market fall is not, by itself, a defence. Where the very risk that made the product unsuitable is the risk that materialised, the loss still flows from the mis-sale.

Regulatory breach. Selling a product the firm was not licensed to sell, or marketing it to a client who did not meet the regulatory criteria, can support a claim – depending on the applicable law, forum and cause of action – most directly in the DIFC and ADGM, where a breach of the conduct rules can found a private claim for damages, not only a regulator’s fine.

The commission behind the sale. What the seller earned, and whether it was disclosed, is increasingly part of the picture. A large, undisclosed commission or inducement – concealed from the client – can itself make the arrangement unfair, independently of whether the product was suitable.

9. Where mis-selling claims fail

A balanced view matters, because not every loss is a claim. Mis-selling cases tend to fail where the product simply underperformed with no flaw in the sale; where the risks and charges were clearly disclosed and understood; where there was a genuine execution-only instruction with no advice given or held out; where the claim is out of time; where the case rests on unsupported oral promises with nothing in the record; or where the causation link between the breach and the loss cannot be made out. Testing a complaint honestly against these at the outset is what separates a claim worth bringing from one that is not.

10. The cross-border dimension

Many UAE mis-selling stories are cross-border. An expatriate – frequently a non-resident Indian – is sold an offshore life or investment wrapper, booked in the Isle of Man, the Channel Islands or elsewhere, by an adviser in the UAE, with a product provider in a third country. That raises three questions at once: which law governs the advice and the product; which forum can hear the claim; and how any judgment or award is enforced across borders. The answers turn on where the advice was given, how the client was classified, what the contract says, and where the assets and the provider sit. For India-facing clients this connects directly to the Indian complaint and consumer routes, covered on the companion India page.

The financial mis-selling practice

ATB Legal advises investors, family offices, SMEs and senior executives on financial mis-selling and suitability disputes across the UAE’s onshore, DIFC and ADGM regimes – assessing the merits and the forum strategy first, then reviewing client classification, suitability and the disclosure and illustration trail, and acting before Sanadak, the onshore courts and the DIFC and ADGM courts, including where an offshore product or a foreign provider gives the matter a cross-border dimension.