MFSA warns consumers against “special offers” and “free gifts”
NOVEMBER 17, 2007

The Malta Financial Services Authority (MFSA) notes with concern media reports on the launch of “offers” by licensed financial institutions, aimed at enticing new and existing customers with free gifts and participation in a prize lottery.

In the past, the Authority has addressed its concerns in this area directly to the financial institutions, highlighting the risk that linking financial products to lotteries, prizes and other promotions could divert customers from focusing on the product itself. These enticements could distract the consumer from properly assessing the need for such product and the ability to continue to finance long term commitments.

Consumers should be wary of falling for marketing gimmicks that offer free gifts or participation in lotteries when applying to purchase bonds and other investment, banking and insurance products. The decision to purchase a financial product should not be the result of impulse, nor should it be clouded by the potential acquisition of a reward that is completely alien to the product itself. The long term financial commitment tied to these products calls for careful consideration. Consumers should seek independent and expert advice from licensed financial intermediaries before agreeing to purchase such products.