The Malta Financial Services Authority (MFSA) issued a notice targeting regulated entities under its jurisdiction on Friday, detailing a series of guidelines about Obligations to comply when promoting rewards and giveaways. According to the press release, the companies should meet these conditions when launching marketing campaigns of financial products or services.
“Linking any kind of reward to the Acquisition of a financial service can encourage consumers to purchase products or services which are not required and/or do not meet their needs. Having observed a recent upsurge in the number of promotions entailing giveaways and rewards, the MFSA is stating its position on these promotional practices, advising regulated entities on what is acceptable and within which parameters this can be carried out,” the MFSA noted. Furthermore, the regulator said that gifts could only be offered in case where “these are related to the Product or Service being offered and enhance the value thereof.”
Also, these gifts cannot be of 'substantial' value, although it did not clarify a threshold that the value should not cross. “Unsolicited calls to clients should be avoided, and consumers should not be subject to undue pressure by the Regulated Persons’ representatives. Promotional materials should be reviewed before they are launched (ex-ante) by the respective Compliance Officers to ensure that they are compliant with the applicable rules,” the regulator added.
Considering Factors beyond How Attractive a Gift Is
In the notice, the MFSA warns investors that they should make sure that all giveaways and gifts should comply with these requirements, and not only consider the fact of attractive offers like the ones that offer free gifts or the possibility to participate in a lottery before investing in a financial product.
Recently, the MFSA Board of Governors announced that it had secured Joseph Gavin as its new Chief Executive Officer, effective from September 2021.
