MFSA urges to financial institutions to clearly list their payment accounts services, terms and fees

The Malta Financial Services Authority (MFSA) has encouraged local financial institutions to clearly list details on payment accounts, such as services, terms and fees.

In a mystery shopping exercise conducted by the MFSA in collaboration with the European Banking Authority (EBA), it was revealed that fees and features related to payment accounts were not always easily accessible on financial institutions’ websites.

The exercise involved the assessment of financial institutions through a total of 50 online or offsite interactions.

When visiting the financial institutions’ websites, the mystery shoppers could not always easily find the features of the payment account.

The same happened when looking for the Fee Information Document. This highlights all fees relate to a specific payment account and is necessary for clients to be able to determine which account suits their needs, while also comparing it to offers by other entities providing this service.

“In cases where the Fee Information Document was available on the website, it was noted that the document did cover the relevant information and fees,” MFSA stated.

Generally, when available, this document was also found to be in the standards format as required by the applicable regulations.

The MFSA remarked that in cases of payment accounts, the information that should be readily accessible to clients is to include all the different types that the entity is offering. In the case where an entity offers only one type of payment account, the MFSA notes that, this should also be highlighted to the clients.

Additionally, potential clients are to be clearly advised of the documents and information which they would need to provide to the financial institution prior to opening a payment account.

Reacting to the outcomes of the exercise, head of conduct supervision Sarah Pulis said that since financial institutions typically operate through digital means, and no face-to-face interaction with their staff can take place, “it is important that all information provided to clients is clearly and easily accessible.”

“Mystery shopping exercises are among the several research methods that help us regulators assess current market practices, enabling us to identify gaps and encourage providers to up their business conduct standards,” she continued.

In his comments on the results, chief officer supervision at the MFSA Christopher P Buttigieg remarked that the authority’s “ultimate objective remains to protect consumers and maintain confidence in the market.”

MFSA encouraged institutions to thoroughly review the full EBA report. The findings of the mystery shopping exercise have been outlined in a “Dear CEO Letter” which was recently sent to licensed entities, and also available on the MFSA’s website.