Issue link: https://maltatoday.uberflip.com/i/1515910
2 NEWS maltatoday | WEDNESDAY • 14 FEBRUARY 2024 2 KURT SANSONE ksansone@mediatoday.com.mt BANKS are not disclosing key information on personal loans when customers first enquire about them, a mystery shop- ping exercise conducted by the financial services watchdog has revealed. The exercise also showed that costs were sometimes not ex- plained clearly and customers were directed to the bank's website instead of being given immediate answers. The Malta Financial Servic- es Authority said that 62% of the mystery shoppers were not provided with conditions relat- ed to early repayment of loans. The exercise consisted of 50 interactions and was undertak- en by the MFSA in collabora- tion with the European Bank- ing Authority. In a statement, revealing the findings, the MFSA said several credit insti- tutions have proactively taken steps to enhance consumer ser- vice levels based on the author- ity's recommendations. The MFSA said that a good practice identified during the interactions was that the ab- solute majority (96%) of banks under review did not try to increase the amount of credit requested by the mystery shop- per by for example, automati- cally adding a payable fee, such as a commitment fee, to the amount of the loan. It also emerged that cli- ent-facing staff was not active- ly cross-selling other products offered by the bank, which sug- gests that banks are avoiding practices that could lead to fi- nancial product mis-selling. In a separate evaluation in- volving another 50 mystery interactions with credit in- stitutions offering payment accounts, the MFSA found limitations in the information provided to clients. "In only 11% of face-to-face interactions were the mystery shoppers offered details about the full range of payment ac- counts available, while a signif- icant 75% neglected to discuss optional services associated with these accounts," the MF- SA said. Another finding revealed that in onsite visits, 63% of credit institutions did not proactively provide the essential document detailing account fees. These documents were often difficult to locate on the banks' websites or were provided only upon shopper prompting. "Nevertheless, the exercise has shown that the Fee Infor- mation Document was gener- ally in the standard format as required by the applicable reg- ulations," the report said. Sarah Pulis, head of Conduct Supervision at the MFSA, said the exercise wanted to ensure that institutions comply with regulatory requirements and prioritise consumer protection. "While certain positive prac- tices were observed, the find- ings highlight areas where institutions need to improve. Information on costs and rights should be readily available and presented clearly to consum- ers, across all channels, as early as at enquiry stage. The MFSA also expects bank staff to be regularly trained on product knowledge, professional con- duct, and accurate information provision. In our interaction with these institutions after the study, we have noticed a sig- nificant commitment by banks to work on these areas for en- hancement for the benefit of consumers," she said. Christopher P. Buttigieg, chief officer Supervision, said a primary objective of the MFSA was to ensure that the interests of consumers are properly safe- guarded. "Our supervision also focus- es on the business conduct of financial service entities, to make sure they always act in the best interest of consum- ers. This mystery shopping ex- ercise continues to underline the importance that we give to consumer protection," Butti- gieg said. The authority said it will con- tinue to engage with banks and work collaboratively to address observations flagged during the exercise and promote con- tinued compliance with regula- tions. Banks failed to disclose all personal loans information to mystery shoppers Gozo business lobby groups support new stone façade policy A prospective policy requiring all new buildings in Gozo to have stone facades has been welcomed by tourism and busi- ness lobby groups on the island. The Gozo Tourism Association said the decision was a "breath of fresh air" while the Gozo Business Chamber de- scribed it a "first building block" towards holistic planning. The new policy is one of the first deci- sions taken by Gozo and Planning Min- ister Clint Camilleri since being assigned the planning portfolio last January. In an interview with MaltaToday re- leased on Sunday, Camilleri said all new buildings in Gozo will need to have fa- cades made of Maltese stone. The same principle will apply to the backside of buildings if these overlook ODZ areas. The GTA said the policy is in line with its views on development on Gozo. "During the past years, the Association has advocated that development in Gozo should be in line with and respects the characteristics and the urban fabric of the island," the GTA said. These attributes make Gozo a distinct tourism destination within the Maltese archipelago, the GTA added. It noted the farmhouse concept developed years ago and several recent boutique hotels renovated in local stone were the cata- lysts for a niche type of accommodation synonymous Gozo. "This decision is a breath of fresh air in the development frenzy taking place presently on Gozo," the GTA said, ex- pressing hope it will be the cornerstone on which Gozo's economy moves ahead in "a different, sustainable and enduring way". The Gozo Business Chamber react- ed positively to Gozo being considered a test-bed for this new policy, given its small size, distinctiveness, and homoge- neity. "The Chamber believes this is an im- portant first step whereby a regional outlook is adopted to policy making, not one which is national, but one which is place-based, and which takes into con- sideration the context of the island and preserves its distinct characteristics," the GBC said. It augured the initiative should pave the way for further consultation with all the stakeholders on planning matters, where "clear rules and guidelines are required". "The Chamber believes that this initia- tive is the first building block towards a holistic planning perspective for the is- land which takes into considerations its needs, preserves the environment, and creates an equitable situation for all," it added. On Sunday, the minister's announce- ment was welcomed by the Malta Devel- opment Association. The Gozo Tourism Association and Gozo Business Chamber welcome decision to have stone facades on all new buildings in Gozo The Malta Financial Services Authority said that 62% of the mystery shoppers were not provided with conditions related to early repayment of loan