The Office of the Arbiter for Financial Services (“OAFS”) has been established since 2016, by virtue of Chapter 555 of the Laws of Malta. It was declared as the official entity for Alternative Dispute Resolutions (“ADR”) in Malta for claims against financial service providers falling within the scope of Directive 2013/11/EU. This phased out the role of the Consumer Complaints Manager.

Financial service providers (“FSP”) are institutions such as banks, insurance companies, trustees etc. The FSP must be licensed or authorized by the Malta Financial Services Authority (“MFSA”) for a complaint to be made against it through the OAFS.

On the other hand, the complainant must be a natural person[1] or a micro-enterprise[2]. Claims may only be instituted by the complainant against an FSP which the consumer is directly linked to (for instance the insured against their insurer).

In any case, the first step that the complainant should take is to file a complaint with their financial service provider. This gives the opportunity for the FSP to investigate the complaint first. Should the FSP fail to remedy the situation, only then can one file a formal complaint with the OAFS.

 Failure by the FSP arises if:

1. The complainant sent a letter of complaint to the FSP but did not receive a satisfactory reply;
2. The complainant sent a letter of complaint to the FSP, which letter has not been acknowledged within 15 working days; OR
3. The FSP offered a settlement which was rejected by the complainant.

Once the complaint is accepted and being considered by the OAFS, the FSP should continue to deal with the complainant as usual, such as handling their accounts and affairs, as the case may be.

The FSP is free to revise any earlier offer made or propose a new offer if it thinks that it would lead to an amicable resolution of the dispute. Simultaneously, the OAFS should be informed of any material developments relating to the complaint, including any revisions to already existing settlement offers, or any new offers made by the FSP to the complainant.

Complaints shall not be accepted if a period of two (2) years had lapsed from the day on with the complainant first had knowledge of the matters they were aggrieved by.

Decisions of the Arbiter are legally binding upon the parties. However, they are subject to appeal by either party in front of the Court of Appeal (Inferior Jurisdiction).

Should no appeal be made within twenty (20) days from the date when the decision of the Arbiter was notified to the parties, the Arbiter’s decision becomes res judicata and cannot be appealed.

A decision by the Court of Appeal and a decision of the Arbiter res judicata shall constitute an executive title[3].

For more information or assistance please contact Dr Robert Tufigno and Dr Delilah Vella.

[1] May also be a successor in title.

[2] A micro-enterprise is a firm that does not employ more than 10 persons and its turnover/balance sheet totals do not exceed €2,000,000.

[3] Article 253 of Chapter 12 of the Laws of Malta (COCP)