March 15 is the day consumer rights are remembered and celebrated worldwide.
Worldwide activities are organised not only to remember but also to support and promote the basic rights consumers have whenever they purchase a product or service.
Many countries, including Malta, mark this day by organising a number of activities whereby people are informed and educated about their rights as consumers.
As consumers we have basic rights that protect our purchases. The right to choose is one of these rights – we are legally entitled to be able to select from a range of products and services offered by various sellers at competitive prices, and whatever we buy should be of satisfactory quality.
Unfortunately, in the financial services sector this basic consumer right is not working to its full potential. This is the main reason why Consumers International has once again chosen the theme ‘Our money, our rights’ for this year’s World Consumer Rights Day.
Consumers International reports that consumers do not really exercise their right to choose within the financial services industry, as people are reluctant to change their financial service provider even when they are not satisfied with the service they are receiving.
Many consumers feel it is too difficult, or not worth switching providers. Hence, service providers do not make any real efforts to improve their service or cut costs.
According to Consumers International, there are various factors that stop consumers from exercising their right to choose: the switching process could be complicated and time-consuming; it could be costly; or mistakes could be made and customers’ money may be lost.
Moreover, very often consumers are committed to a product or service for a period of time; there is also the issue of bundling, which requires consumers to purchase products in addition to the ones they actually wanted. A lack of clear information explaining the differences between the various providers also hinders choice and switching.
Even if these obstacles had to be overcome, many consumers still feel there isn’t much point in switching, as most service providers offer the same quality of service.
Consumers International agrees there is a lack of real choice because it is a market that is dominated by a small number of large companies.
Statistics show that in the EU only nine per cent of consumers have changed their account providers during 2007-2008, while 25 per cent of consumers changed their car insurers and 22 per cent their internet company.
A number of measures that could make it easier for consumers to switch have been identified. For example, it would be much easier for consumers to switch banks if they get to keep the same bank account number.
The transition could also be made easier for a consumer if the new bank would be responsible for writing to the consumer’s previous bank ensuring payments are transferred to the new account.
Another measure could be reducing the direct costs of switching. Since banks can charge high fees for closing or transferring accounts, such fees may actually discourage change.
Clearer information on the various deals available in the market may enable consumers to compare and make an informed choice. Increased competition in the financial services sector is also fundamental in ensuring a wide choice for consumers.
In Malta, it is the Malta Financial Services Authority that is responsible for spreading information among consumers through slots on TV and local radio, and also by distributing booklets and leaflets. Consumers may also find information about their rights upon purchasing various financial services by visiting http://mymoneybox.mfsa.com.mt .
Consumers may seek the financial authority’s help whenever they have a dispute with a financial entity and this could be done by calling freephone 8007 4924. The MFSA provides advice and investigates individual complaints with the aim of reaching an amicable settlement between both parties.
The Malta Competition and Consumer Affairs Authority is marking World Consumer Rights Day with an activity on Saturday, from 9 a.m. to 1 p.m., at St George’s Square, Valletta.
Students who participated and won competitions organised by the Office for Consumer Affairs at the Malta Competition and Consumer Affairs Authority will be officially presented with prizes by Minister for Fair Competition Jason Azzopardi.
Since information is the best tool, those who attend will be provided with information on the eight basic consumer rights and on what to look out for when purchasing a financial service.
Moreover, any questions customers may have about their rights can be directly asked to officers from the Malta Competition and Consumer Affairs Authority.
odette.vella@mccaa.org.mt
Ms Vella is senior information officer, Office for Consumer Affairs, Malta Competition and Consumer Affairs Authority.