This story is written by an Egyptian on an Egyptian website. It also quotes an Ha'eal district spokesman, Sheikh Motlab al-Nabet, and mentions that it is as a result of an incident cited in a Saudi newspaper- namely al-Watan.
http://bikyamasr.com/48621/saudi-moral-committee-threatens-to-cover-temp...

Strange that the sources for this story are muslims, hence we should conclude that this being an anti-muslim piece of propaganda to be false.

I suspect you lived in Jeddah - the most liberal of provinces in Saudi.

ps.
A quote from the Egyption article above:
'Saudi women are already forced to wear a loose black dress and to cover their hair and in some areas, their face.....'