The Bank of Spain asks entities to avoid “frustration” with these promotions and reminds them to clarify the terms of the hooks they use with their customers
With no sign of a struggle by financial institutions to offer better interest rates on savings deposits, the banks continue to fight their particular commercial battle to acquire new customers with the wage hook. Most entities take advantage of this stable income of citizens so that they deposit it directly into their accounts in exchange for juicy gifts, which can hide more than one unpleasant surprise from customers.
Faced with this situation, the Bank of Spain has issued a public warning to entities reminding them of their obligation to comply with what has been agreed with clients and to limit themselves to the current code of good practice. The commercial policy of the bank is to offer money or products as a gift so that customers have a payroll office based in the entity.
The regulator has explained that banks should “avoid raising false expectations” among customers. So if the entities know that some people will not be able to meet the requirements to benefit from the campaigns, they should inform from the start. They should also warn about the expiration date of the campaign so that future customers can take advantage of the promotion.
In addition, the good practice criteria also require banks to clarify the terms and conditions of the promotions they offer, as advertising alone is not enough. “Entities must provide you with clear information about the necessary requirements to benefit from the promotion in question, in the account contract or otherwise,” the Bank of Spain has indicated.
Another problem that may arise is that the promised gift is out of stock. For this reason, the regulator insists that the bank explains the distribution criteria used when the promotional gifts run out. If the promotion consists of the delivery of a gift and the entity notifies you that it is out of stock, you must justify the order of award that they followed when distributing the promotion.
Also remember that they must enforce the agreed terms. “In exchange for the delivery of the gift, the entity will most likely require that the account remain open for a specified period of time, normally two years, or meet some other requirement, such as, for example, direct debit of a series of receipts,” also points out the Bank of Spain.
Sometimes many of these promotions have a permanence obligation. In that case, the banks must maintain the agreed conditions for the account throughout the validity period of the permanence. Similarly, in the case of distributing products as a gift, the entity must justify to customers the order of allocation followed in the event that stock is depleted.
Warehouses, in dry dock
The regulator’s warnings come in a context of rising interest rates, despite term deposits being remunerated at a low level compared to interest rate increases.
In this sense, the Asufin organization points out that only small entities, those with a foreign base (even if they operate in our country) “offer products that are already beginning to have a certain appeal”. In the latest analysis of the banking association, it is striking that the large Spanish entities “still have no incentive to offer interesting deposits, in a context of liquidity in the market.” The company emphasizes that “despite being in the same situation, the data shows that in the countries around us, customers’ obligations are being reimbursed.” The average rate in Spain is 0.6% compared to 1.4% in the Eurozone, 1.5% in Germany, 2% in Italy or 2.2% in France.
Source: La Verdad
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
