A financial watchdog has warned banks to be more transparent about new charges levied on their customers.

In his annual report, the financial arbiter said consumers continued to report inadequate communication from their banks regarding charges or changes to practices.

The arbiter said some customers claimed they never received “paper communication” about such changes, as well as other reporting issues with notifications on their banking apps, which disappear after a number of days, thus preventing referral to such communication in the event of a dispute.

“These are valid concerns, and banks need to agree on similar procedures for informing banking customers. The objective is for all banks to share best practices based on years of experience and adopt a horizontal standard of practice, irrespective of one’s bank custom,” the report says.

The arbiter further added that while some banks may use social media channels for marketing, personal communication is vital when conveying significant changes to standard terms or conditions.

One cannot presume that a bank’s responsibility is discharged by just merely posting a blog or a banner on social media, the arbiter said.

Customers expressing frustration

Alfred Mifsud, a former Bank of Valletta director, and Mid-Med Bank chairman, was appointed as the financial arbiter in April, taking over from Reno Borg.

The arbiter’s report notes a trend over the years in customers expressing frustration over the difficulty in contacting their bank via call centres.

Many customers say they spend significant time waiting for someone to answer their call.

While some banks have attempted to manage the volume of calls by directing them through a central line, this approach may have resulted in a bottleneck, leading to further frustration for customers who previously contacted their local branch directly, the report says.

The report says “irate” customers have even resorted to contacting the arbiter’s office, asking staff for their assistance to reach out to their bank on their behalf.

Most cases are resolved quickly when customers initially engage with the arbiter’s office over such a problem, the arbiter said.

Banks must take a more empathetic approach and explain the relevant processes to customers- Alfred Mifsud

Another common complaint received by the arbiter’s office comes from elderly customers who claim they have to answer numerous questions and provide various documents when trying to close their accounts, which at times is initiated by the bank itself due to account inactivity.

Some customers have also raised concerns about the consequences of potential data breaches or information leaks, as banks hold vast amounts of data about them.

The arbiter said these concerns are valid and can be addressed through active education and continuous informational campaigns.

Banks must take a more empathetic approach and explain the relevant processes to customers, including why certain information is requested. Banking staff must not assume that consumers know anti-money laundering rules and regulations, the report says.

“Although we understand that banks must follow the rules and regulations, it is essential that specific procedures are tailored according to the account’s usage and risk level, and that customers are not unnecessarily inconvenienced where transaction monitoring poses a low risk.”