• The Consumer Complaints Handling Procedures in Malta
  • July 27, 2012
  • Law Firm: Mamo TCV Advocates - Valletta Office
  • Pursuant to article 20 of the Malta Financial Services Authority Act (Chapter 330 of the Laws of Malta), the MFSA is required to appoint a Consumer Complaints Manager (“CCM”) empowered to investigate complaints from private consumers (as opposed to companies or enterprises) in connection with any financial services transaction involving a financial entity regulated by the MFSA (and where necessary or appropriate to refer such cases to the MFSA’s Supervisory Council for consideration) and, wherever the circumstances so require, to encourage the parties to the dispute to reach an out-of-court settlement (whether in Malta or in another EU Member State or EEA State). For the proper implementation of the said article 20, the MFSA had, way back in May 2003, published two sets of documents intended to provide further information on the role of the CCM and the complaints handling procedures within the MFSA and the financial entities themselves (see: http://mymoneybox.mfsa.com.mt) (“MFSA Rules”). The most recent amendments to the said MFSA Rules were introduced in May 2012, aimed at further safeguarding the interests and legitimate expectations of private consumers within the sector.

    It is pertinent to note that, unless the complaint is of utmost urgency and requires immediate consideration, prior to the involvement of the CCM, the MFSA Rules require the private consumer to initially lodge a complaint with its financial entity demanding an explanation and/or rectification of the state of affairs. Financial entities should, under general circumstances, respond to such complaints within two months of their receipt. 

    A formal written complaint with the CCM may be filed by the private consumer free of charge if, following the complaint to the financial entity as aforesaid, (i) the complaint is rejected, (ii) two months from the lodging of the complaint have elapsed without the financial entity having reached settlement thereof, or (iii) the private consumer remains unsatisfied with the settlement.

    There is an exhaustive list of instances, however, where the CCM may dismiss a complaint without recourse to the Supervisory Council or without even considering its merits. It is in this respect that the amendments to the MFSA rules find most significance. Any previously applicable time-bars have been rendered inapplicable, and may therefore no longer be used by the CCM as a basis for the dismissal of a complaint (or at least will not preclude the CCM from proceeding with an investigation in circumstances where he deems this appropriate notwithstanding any applicable time-bar). Indeed, the CCM may now conduct an investigation even in those instances where the merits of the formal complaint are legally time-barred. Moreover, the amendments have also removed the time-bars imposed against complaints submitted to the MFSA once 6 months have passed from when the private consumer was notified in writing by the financial entity that his complaint was not upheld, or submitted to the MFSA following more than 12 months from when the private consumer became aware of the circumstances giving rise to the complaint.

    Another innovation is that the financial entity and the private consumer are now also free to reach a settlement at any time prior, or after, the CCM has concluded his investigations. In any such case, the financial entity is to make the terms of the settlement available to the complainant before the agreement is reached.

    The service provided by the CCM, now in its tenth year, is intended to provide private consumers with reliable, non-bureaucratic and impartial assistance, without the need to seek professional advice and take the traditional dispute resolution process route, while not being prejudiced from doing so should they not be satisfied with the CCM’s (non-binding) conclusions.