Special Offers and Free Gifts

You might have come across an advert in the local media of “offers” by financial firms offering you a free gift or a substantial discount if you purchase an investment, open a bank account or starting a new insurance policy.

Such adverts or offers are often common during trade fairs in which all firms (and not only banks and other financial firms) are at their marketing best.

Potential customers may often be tempted to enter into a financial commitment not really because they see benefit in the product itself but because of a promotional gift or offer. Some might even offer to keep your children entertained while the sales representative explains the ins and outs of the offer!

Financial firms are well aware that, in the past, the MFSA has expressed strong views about the use of lotteries, huge discounts, prizes and other promotions linked with sales of financial products. What’s the harm for consumers? Simple: such promotions are likely to divert customers from focusing on the product itself. These promotions could distract the consumer from properly assessing the need for the product and the ability to continue to finance long-term commitments.

If you really cannot afford to miss a particularly interesting proposition, then read the following:

  • If the offer contains the following (or similar) wording – Offer valid for qualifying accounts opened in person at participating branches. Terms and Conditions apply – stop and think!. The terms and condition may require you to leave a certain amount in the account or may attach additional products such as cards etc. Some promotions may even tie you in for a period of time! These might increase the costs as well as bundling you with products you may not actually need.

  • Some offers might be valid for one time only and the cost to keep the product might be quite hefty once the promotion expires. You may end losing out especially given that any cooling off period attached to the products may be no longer than 30 days. Not all financial products give you the ability to pull out of the contract within 30 days. In any case, stopping the product after the initial grace period could mean losing out on the original investment/product as well as the benefits of any offer you may have availed of during the promotion.

  • A decision should never be taken on the spot, even if the person acting on behalf of the financial firm insists that the offer is only valid for a limited period or for the first 50 subscribers – that is just a way to make you feel ‘guilty’ if you miss the product. Always take your time, taking any brochures with you home. Never sign anything on the spot.

You can usually arrange to set up a meeting with the same company for a time convenient to you when questions can be asked and any doubts or issues can be cleared.
To summarise:

  1. Never purchase a financial product because of the gift or promotion you are offered.

  2. Trade fairs, supermarkets or open markets are not the ideal places to enter into a financial commitment. You may agree to meet at a later stage at the offices of the financial entity.

  3. Never enter into a financial commitment at the first meeting. Digest the information you are given. Ask questions. Keep notes. Sign the documents only if you’re convinced that your decision is best for you.