The Malta Financial Services Authority has joined local and international organisations in celebrating World Consumer Rights Day, a yearly occasion which serves to highlight and raise awareness on the rights of consumers around the world.
The MFSA is celebrating this day by highlighting a fundamental right for consumers of banking products and services - that of receiving clear and concise information related to their bank account.
With over 1.5 million deposit bank accounts currently held by Maltese and foreign residents with local banks – translating to an average of three bank accounts per resident – the campaign should appeal to the majority of the public.
It revolves around the provision of information through clear and easy to understand documents which are available free of charge, including the fee information document and the statement of fees (SOF).
The fee information document assists the consumer in his choice of bank account, prior to entering into a contract with a service provider. This document, which is to be provided for each account offered by the bank, should contain the terms of the key services linked to a bank account as well as the corresponding fees for each service.
After entering into a contract for a bank account, each consumer has the right to be provided, at least annually, with a SOE for the relevant period.
This document would cover items such as the total amount of each fee charged, interest applied, information regarding any overdraft interest charged (interest rate and total amount), the credit/debit interest rate applied and the total amount of interest earned or paid.
The SOF is different to the monthly or yearly account statement which most bank account holders are familiar with, varying not only in format but also in the objectives that they satisfy. While account statements aims to give account holders full disclosure of all the movements to and from the account, the SoF is intended to help consumers to both understand and compare fees through a common format.
Through this document, the customer will be able to have a general overview of all the fees paid during a specific period, understanding the expenditures to which the fee relates and assess the need to either modify consumption patterns or move to another provider.
The provision of these documents will go a long way into delivering transparency and improving the relationship between the customer and the bank.
MFSA’s conduct supervision head Michelle Mizzi Buontempo commented that “As the single financial services regulator in Malta, the MFSA is continuously working to create awareness and protect consumers in the financial services sector. Such initiatives are considered as critical in our efforts towards becoming one of the leading jurisdictions in Europe.”
Further information on this subject as well as an explanatory video are available on the MFSA website.