MADINAH — The Ministry of Commerce and Industry has noted an increase in the number of companies and individuals exploiting their customers and has released new regulations and warnings to the general public to protect the consumer and the economy in response, Al-Watan reported.
In order to limit money scams and fake companies, citizens can report any instances of exploitation they come across as consumers. Citizens are free to reach out to the ministry through its social media accounts.
Head of the Madinah Chamber of Commerce and Industry Mahmoud Rashwan said commercial exploitation and deception is considered a criminal offense in any country.
He believed the sudden increase in commercial exploitation is due to the lack of strict regulations in the market and the high profit rate of small businesses and investors.
He said: “The Ministry of Commerce and Industry, the Saudi Fund Association and the Capital Market Association all take responsibility for licensing businesses.
“The Capital Market Association and banks should limit and regulate companies' capital. A system to legitimize businesses should be set to protect the consumer and stop fake companies from carrying out their activities.”
Rashwan explained some start-up owners were conning people into funding non-existent projects.
The businessmen would take 60 percent from their victims' money as profit and invest the rest in a fake company.
These investors would continue the cycle of scamming their victims and evade the authorities by transferring their ill-gotten gains into various untraceable accounts.
Rashwan said the unstable status of the stock market has attracted investors with substantial capital looking to make a quick profit. He said citizens and consumers must report to the ministry any commercial exploitation they experience.
The penalties for commercial exploitation include five to 20 years imprisonment and a fine of SR500,000 to SR10 million.
