Today is World Consumer Rights Day, a day specifically dedicated to highlighting the rights that we, as customers, enjoy with the various businesses we interact with.
And if there’s one thing that we are all customers of in one way or another, it’s banks or other similar institutions that handle our money.
Which is why it’s pretty useful to understand the rights that we have not only when starting our relationship with these service providers, but also what we are entitled to on an ongoing basis.
Thing is, how many of us know exactly what fees we pay? Probably, not many of us.
Luckily though, the Malta Financial Services Authority is on a campaign to educate us about the whole thing.
Why should I care about my rights?
Choosing who you trust with your money is a big decision. Reputation plays a big role, but an equally important consideration is how much you’ll be charged for the service.
The last thing you want is to start a relationship with a bank or other payment service provider, only to later realise that you’re paying for the services through your nose.
To facilitate your decision, payment service providers are obliged under local and EU law to provide you with certain minimum information in a clear and easy manner.
OK understood. What do I need to know?
Before opening an account, the banks or other payment service provider you’re dealing with must provide you with what’s called a Fee Information Document (FID).
The FID provides general information on the costs associated to your account. In other words, the FID should clearly outline the fees that you will be paying to your provider on an ongoing basis.
The document must be made available in paper or electronic format and must be given to you well in advance so that you are able to compare the fees with those charged by other payment services providers.
A FID must be provided for each account you open, and it should be accompanied with the standard terms referring to the list of services the institution will be providing you for that particular account.
Once you’ve chosen a service provider, you must regularly be provided with information about your charges.
At least once a year, you should be provided with a Statement of Fees (SoF), which is a document that will contain the total amount of each fee you pay, interest tied to your account, information on any overdraft interest charged, the interest rate tied to your credit and debit cards, and the total amount of interest earned and paid. As with the FID, the SoF may be provided in printed or electronic format.
Woah! That’s a lot of information. How is this useful to me?
Monitoring what you’re paying in fees is important in many ways.
Apart from keeping count of how many pennies you are spending, it also allows you to monitor your spending patterns as well as helping you compare whether the fees are competitive.
Both the FID and SoF are free of charge, and if you’re feeling extra-patriotic, you can request that these are provided in Maltese together with the standard English version.
I already receive a monthly account statement, so I’m fine
Actually, not really.
The SoF is different to the statement you receive on a monthly basis. The latter highlights the cash movements in and out of your account, while the SoF is particularly targeted towards helping you understand and compare fees through a common format.
I hardly open my banking docs, they’re all gibberish anyway
Financial services documents contain a lot of technical lingo that isn’t always easy to understand.
Thankfully, providers are also obliged to provide you with a Glossary of terms used in the FID and SoF, meaning you will have a clear way of understanding what the hell the documents are referring to.
The Glossary must be available at all times on the provider’s website, plus you can request this in paper format and also in Maltese if you wish.
So there you have it. All the information you will need to know about payment services providers and what you need to pay them.