The procedures leading up to the opening of the office of the financial services arbiter, which will receive complaints from consumers of financial service products, make recommendations to financial service providers, and deliver binding decisions, has been launched.

Each individual, as well as heirs, is eligible to put forward complaints about shortcomings in financial services offered. Micro enterprises, which employ ten people or less, can also make use of the arbiter. Consumers now have the choice as to whether to file complaint in court or with the arbiter; however, the same case can’t be filed in both institutions.

The Malta Financial Services Authority (MFSA) can only provide a recommendation on compensation, however, the decisions taken by the arbiter are binding and compensation will be mandatory. The arbiter can offer compensation of up to €250,000.

Consumers should first put forward the complaint to the financial agent offering the product – if consensus is not reached, than the case could be forwarded to the office. The mediator will try reaching a compromise between both parties, but if this also fails, than the arbiter will take a binding decision.  The arbiter needs to take a decision within 90 days.

If consumers feel that the judgment by the arbiter should be appealed, they may do so in court. However, the arbiter can’t be used to appeal compensation judgments by the court. Cases which are still pending by the MFSA or the court can also be put forward, however the case filed in court needs then be dropped.

Consumers will be able to file a case within the stipulated period of two years from when the shortcoming was noticed. However, the office of the financial arbiter is providing a one-time chance for consumers to put forward cases dating from January 2000.

Individuals or groups will be able to file complaints about financial operators which had their licence withdrawn or which went bankrupt.  In cases where corporations went bankrupt, consumer can be given a compensation of €20,000 provided by the Investor Compensation Scheme.

The arbiter will not get involved in disputes between financial operators – it will only work with the consumer.

The office shall not be giving advice on financial investment – that role will still remain the role of the MFSA.  In addition, it can only take decisions on financial services offered by agents licenced by the MFSA.

Tariffs to open up a case within the office of the financial arbiter are still to be decided.

The procedures were launched by Finance Minister Edward Scicluna and Minister for Social Dialogue, Consumer Affairs and Civil Liberties Helena Dalli.