Anti Commercial Fraud Law Saudi Arabia: Buyer Rights and Penalty

You bought car tyres from a shop in Riyadh for SAR 2,400. They were sold as made in Japan. At the workshop you discover that the country of origin is different and the production date is old. What can you do?

The direct answer: if it is proved that the product is fake or adulterated (maghshoush), Article 22 of the Anti-Commercial Fraud Law requires the seller to withdraw it and pay its value back to you, and you can also claim compensation for any proven harm. Even if it is not fraud but only a defect, the Civil Transactions Law gives you the right to cancel the sale or receive the difference in price, as long as you file your claim within 180 days of delivery.

When is a product “fraudulent” under Saudi law?

Article 1 of the Anti-Commercial Fraud Law treats a product as fraudulent in three cases: if it was changed or tampered with in a way that reduced its value in its substance, type, origin, weight, size, number or capacity; if it does not conform to the approved standard specifications; or if it is spoiled and no longer fit for use. Article 2 makes it a violation to deceive a buyer about the substance, origin or quantity of a product; to sell, offer or hold a fraudulent product for trade; or to import it.

A normal fault after a year of use does not make a product fraudulent. But a false country of origin, a 1-litre bottle that holds 800 ml, or a device that does not meet the specifications are all clear examples.

What are your rights as a buyer if you discover fraud or a defect?

You have two routes, and you can use both. The first is under the Anti-Commercial Fraud Law: withdrawal of the product and refund of its value, while keeping your right to compensation (Article 22). The second is the warranty against defects in the Civil Transactions Law. It is wider, because it does not require the seller to have cheated:

• The seller guarantees that the item is free from any defect that reduces its value or usefulness, even if he did not know about it (Article 338).
• You may cancel the sale and return the product, or keep it and receive the difference in price. The seller can avoid this by giving you a sound replacement of the same kind.
• You may also claim compensation for the harm you suffered, where there are grounds for it.

Some conditions protect this right. You must notify the seller of the defect within a reasonable time after you discover it; otherwise you are treated as having accepted it (Article 340). You must not have known about the defect when you bought (Article 339). A defect claim will not be heard after 180 days from delivery, unless the seller agreed to a longer warranty, and the seller cannot rely on this period if it is proved that he hid the defect by fraud (Article 344). A “no return, no exchange” sign does not protect a seller who deliberately hid the defect (Article 343).

How do you protect your right from the first day?

1. Keep the invoice or payment receipt, and a screenshot of the advert or product description you relied on.
2. Photograph the package, label, serial number and production date before you open or change anything.
3. Stop using the product if it may harm health or be dangerous.
4. Send the seller a written message explaining the problem and asking for a refund or replacement, and keep his reply.
5. If he refuses, file a report with the Ministry of Commerce with the facts and attachments, or file your claim in court.

A small claim against a shop or online store is usually filed at the General Court. Under Article 31 of the Implementing Regulations of the Commercial Courts Law, the Commercial Courts hear claims against a trader in commercial contract disputes only when the original claim is more than SAR 500,000.

Sara bought a water filter for SAR 1,800. The label said it met a certain standard. A month later, an accredited test showed it did not.

She notified the seller in writing on the same day, and he offered a sound replacement. The Civil Transactions Law gives the seller this right, so if the replacement really is sound, the civil dispute ends.

If the seller refuses, she can claim back the SAR 1,800 and the cost of the test if she can prove it, and she can report the violation to the Ministry.

What is the penalty for commercial fraud in Saudi Arabia?

Article 16 punishes anyone who commits one of the violations in Article 2 with a fine of up to SAR 500,000, prison of up to two years, or both. The penalty rises to a fine of up to SAR 1 million, prison of up to three years, or both, in the cases listed in Article 18. These include a fraudulent product that harms human or animal health, the use of false scales or measures, and a trader who disposes of a suspected product before the test result comes out.

• Closure of the shop for up to one year (Article 20).
• Destruction of the fraudulent product and confiscation of the tools used in the fraud in all cases (Article 21).
• Publication of a summary of the judgment at the violator's expense when prison is ordered; the court may also order publication in other cases (amended Article 25).
• Deportation of a non-Saudi convicted by final judgment of one of the violations in Article 2, and a ban on entering Saudi Arabia, according to the Ministry of Interior's rules (amended Article 23).
• The penalty is doubled if the violation is repeated within five years of the final judgment, and the violator may be banned from commercial activity for up to five years if it is repeated again (Article 24).

A person who is not a government employee and helps uncover fraud may receive a reward of up to 25% of the fine collected (Article 11).

Is the seller exempt if he bought the goods from a supplier?

Not automatically. Article 14 presumes that the violator knew about the fraud. Article 15 makes sellers and shop managers responsible for violations, and limits the penalty to the original violator only if the seller proves that the violation happened for a reason beyond his control. Clear invoices from a known supplier, certificates of conformity and an inspection record at receipt are what build this defence. In all cases, the seller keeps his right to claim against his supplier.

This is general information based on the official Arabic texts of Saudi laws, which prevail over any translation. It is not legal advice for your specific case.

Practical solutions for both sides

If you are the buyer:

• Notify the seller in writing as soon as you discover the problem. Delay may be read as accepting the defect.
• Count the 180 days from the date of delivery, and do not let them pass in back-and-forth messages.
• Be clear about what you want: a refund, the difference in price, a replacement, or compensation for harm with documents.
• Do not publish firm accusations naming the shop before the fraud is proved. Use the official report instead.

If you are the seller:

• Stop selling the suspected batch immediately. Disposing of it before the test result raises the penalty to Article 18.
• Collect the supplier's invoices, certificates of conformity, and storage and transport records.
• If you sold a product that was proved to be fraudulent, inform the Ministry of the quantities and the names of the buyers, as Article 3 requires.
• Deal with the buyer's complaint with a replacement or refund when the defect is proved, and then claim against the supplier.

If you have a suspected product, or a report has been filed against your store, send the invoice, photos of the product and the messages on WhatsApp, and we will explain your position and the most suitable claim before the deadlines pass.