Bank Information

During the years, bank charges have been one issue that both business and local consumers have had to endure. It was very unfortunate that when the banking market started to open up in Malta the first thing that increased were not the benefits to consumers, but the charges. The prime mover was HSBC but this was soon followed by Bank of Valletta and later APS. Thus, the result was an escalation of bank profits and higher charges for consumers.

Mind you, this is not a local phenomenon, though in a small market the impact is much greater. The EU is very much concerned about this aspect since this phenomenon is creating a very uneven market within the Single Market. One result of such concern was the setting up of the Consumer Markets Scoreboard which tries to monitor market signals across the EU. This is becoming a very important policy tool and there are plans that this will be expanded over the years.

The latest Consumer Markets Scoreboard confirmed that there were three different retail financial services issues where consumers experience difficulties:

Pre-contractual information;
Some services are opaque in structure; and,
Switching of bank accounts.

In this article I want to take a closer look at the first factor, using as an example the third factor as there have been some recent developments.

One essential feature of a market economy is that consumers would be able to get the best deal available. At times this would require switching of bank accounts. This seems to be a simplistic operation but in practice it is not that simplistic, and often quite complicated and frustrating.

The EU is taking this matter quite seriously. In fact, one of the measures is that of simplifying the transfer of current accounts between different banks. Theoretically, this should not be complicated but in reality it seems that even transferring accounts from one branch to another within the same bank seems to be shrouded in mystery. Recently, someone wrote to a local newspaper pointing this out:

Does this also apply to switching accounts from one branch to another of the same bank, because from my experience this also was a harrowing ordeal?!

Such experiences should now be a thing of the past. However, there is one precondition. The consumers should know about their rights. From the initial statement that was issued by the Malta Bankers’ Association which is a local agency responsible for introducing these measures, the Principles are available at the branches of the most popular banks in Malta.

But what is the availability of such information? What type of information is being given to consumers?

I personally visited a branch of each of the three largest banks - HSBC, Bank of Valletta and APS. In none of these branches was the information readily available in the form of a leaflet. Thus, I had to ask specifically for the information. At first glance this should not be a problem. But if there is a queue of people waiting to be served, this suddenly becomes a problem and the information cannot be said to be readily available to the consumer before the transaction takes place. In two of the branches I visited, it took more than 20 minutes to obtain the information.

At the APS branch, the person behind the counter found it difficult to understand what I wanted. It was after the intervention of a higher official that he understood what I required. After all this effort, all I got was the initial statement printed in the local press.

With regard to HSBC and the Bank of Valletta, at least the person behind the counter understood what I wanted and obtained the document after waiting for it to be printed. Mind you, in both cases, though I specifically asked for the information, both clerks at first thought that I wanted to switch my current account and were going to start the process before I was given the information.

BOV gave me the full document which includes the Principles and other information. The document given was full of technical jargon. I had to go through it to find the new facilitating process that was being proposed to switch current accounts. Instead of an information document, consumers are being presented with a legal document. Moreover, in all cases the documents received were in English.

The document I received from HSBC was much shorter as it included only the three steps required, together with sample letters. This formed only one annex of the original document. Though shorter, it was direct and to the point and quite easy to follow. I was also given the latest schedule of bank charges.

Three points emerged from this exercise. First, Maltese consumers are not conscious of such developments. Even though there was a press statement, this was not enough to make consumers conscious. The staff at one of the banks had to request their marketing section to help them search for the document on their website as I was the only person who asked for such a document.

Second, as already described above, the information is not quite available. Thirdly, though the information was prepared at one source (the Malta Bankers’ Association) I ended up with three different versions of the same document. I would expect that such information be standard.

I sincerely hope that this was the initial phase and that a leaflet in simple language explaining how the consumer should go about the process of switching current accounts would be produced and be readily available.

Unless this is done, the local banks will succeed in making a mockery of a good EU requirement. Unfortunately, this would not be the only time that they succeed in producing a legal document covering their ass and mystifying a process that should be beneficial to the local consumer. They have already done it with MIFID and the Consumer Credit requirements. Let us hope they will not do it again.

Published on Maltastar.com on 19^th November 2009

L-MRA u t-tariffi tad-dawl u l-ilma

Ricentament thabbar li l-Gvern se jahsibha biex jerga’ jcaqlaq ’il fuq it-tariffi tad-dawl u l-ilma. Miniex se nidhol fuq l-effetti li mziura bhal din se jkollha sew fuq is-setturi industrijali u kummercjali u sew anke fuq il-familji. Izda se nerga’ ndur fuq ir-regolatur – l-Awtorita’ ta’ Malta dwar ir-Rizorsi (MRA).

Fi Frar ta’ din is-sena, din l-Awtorita’ wara baraxx ta’ kritika kienet nediet konsultazzjoni pubblika dwar il-principji li għandhom jintuzaw biex jigu determinati t-tariffi tal-elettriku.

F’Mejju rega’ kien hemm revizjoni u l-MRA fir-rapport tagħha, minghajr ma ghamlet l-ebda referenza ghall-konsultazzjoni pubblika, tidher li accettat il-metodu li thaddem l-Enemalta, metodu li jirrifletti l-pozizzjoni tal-Enemalta bhala monopolju. Ghalhekk il-prezzijiet ma jirriflettux il-prezzijiet li seta’ kellna li kieku kellna suq aktar miftuh.

Dan jitfa’ fuq il-konsumaturi l-inefficjenzi ta’ min imexxi din il-korporazzjoni. Aktar minn hekk, dan il-metodu jkompli jinkoraggixxi li l-inefficjenzi jkomplu ghaddejjin u jhallas ghalihom il-konsumatur.

Ftit taz-zmien ilu, din l-Awtorita’ kellha tibdil fit-tmexxija. Ghalhekk qed nistennew li issa l-Awtorita tohrog rapport tal-konsultazzjoni li saret u tghid liema proposti laqghet u ghaliex. Fuq kollox l-Awtorita’ ghandha tispjega kif il-proposti li laqghet iharsu lill-konsumaturi u kif qeghdin iwasslu biex ikollna Enemalta aktar efficjenti.

Letter published in l-Orizzont 4^th November 2009