S.L. 376.8 Art. 31Framework contracts and termination.

(1) Without prejudice to sub-regulations (2)(a), (3) and (4), framework contracts for the provision of a payment account with basic features shall comply with the provisions laid down in Maltese law transposing the requirements of Directive 2007/64/EC.

(2) (a) Without prejudice to any other law, a credit institution may only unilaterally terminate a framework contract for the provision of a payment account with basic features where at least one of the following conditions is met:

(i) the consumer has deliberately used the payment account for illegal purposes;

(ii) there has been no transaction on the account, save for any interest debited or credited from the account, for more than twenty-four consecutive months;

(iii) the consumer provided incorrect information when applying for the payment account with basic features, and had the correct information been provided, the application would have been refused;

(iv) the consumer is no longer legally resident in Malta or in another Member State; and

(v) the consumer has subsequently opened a second payment account in Malta which allows for the use of the services listed in regulation 25(1).

(b) Additional limited and specific cases where a framework contract for a payment account with basic features may be unilaterally terminated by credit institutions may be identified and further prescribed by the Minister: Provided that any additional limited and specific cases as may be further prescribed by the Minister shall, in terms of Article 19(3) of the Payment Accounts Directive, be aimed at avoiding abuses by customers of their right to access a payment account with basic features.

(3) Any termination in accordance with sub-regulation (2)(a)

(i) and (iii) shall have immediate effect.

(4) Where a credit institution decides that it should terminate a framework contract for a payment account with basic features on one or more of the grounds mentioned in sub-regulation (2)(a)(ii), (2)(a)(iv) or (2)(a)(v), or in any additional limited and specific cases as may be prescribed by the Minister in accordance with sub-regulation (2)(b), the credit institution shall, unless such disclosure would be contrary to objectives of national security or public policy, inform the consumer of the grounds and the justification for termination:

(i) at least two months before the termination enters into force;

(ii) free of charge; and

(iii) in writing, by means of registered mail and recorded delivery mail to the last known address: Provided that, if, after three attempts by the credit institution to inform the consumer of such termination in accordance with point (iii), such attempts prove to be futile or are rejected by the consumer, or if the consumer fails to act in terms of the said notice, the payment service provider has the right to terminate the framework contract within ninety days from the date of the third notice.

(5) Where a credit institution decides that it should terminate a framework contract for a payment account with basic features on one or more of the grounds mentioned in sub-regulation (2)(a)(i) or (iii), the credit institution shall, upon termination of the framework contract, inform the consumer of the grounds and the justification for termination in writing, by means of registered mail and recorded delivery mail to the last known address.

(6) Deleted by Legal Notice 324 of 2018.

(7) Any notification given by the credit institution under sub-regulation (4) shall advise the consumer of:

(a) the procedure for submitting a complaint to it against the termination, if any;

(b) the possibility to contact the competent authority and provide the relevant contact details; and

(c) the right to file a complaint with the Office of the Arbiter for Financial Services and provide the relevant contact details.

(8) The credit institution shall keep proper records of its decision for termination and any notifications thereto.