Bill to Protect Financial Consumers Against Cybercrime Now in Motion
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Signed and Sealed: Bill to Protect Financial Consumers Against Cybercrime Now in Motion

Signed and Sealed: Bill to Protect Financial Consumers Against Cybercrime Now in Motion

Current Events | May 19, 2022
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President Rodrigo Duterte signed a bill that boosts consumer protection against cybercrime as the country moves to a cash-lite economy.

With technology becoming more modern, payment methods have evolved from traditional, over-the-counter transactions to more digital means like bank transfers, third-party payment apps, and online credit card transactions. While convenient at best, the downside includes falling prey to online scams and hacking—underhanded tactics classified as cybercrime.

The solution? Stricter rules and improved protection for financial consumers.

That being said, President Rodrigo Duterte signed a bill that protects end-users from cybercrimes a day after the President’s office released an executive order mandating all government agencies to use digital methods in disbursing and collecting payments. Through Republic Act (RA) No. 11765 or the Financial Products and Services Consumer Protection Act (FCPA), the rights of Filipinos to equitable and fair treatment, disclosure and transparency of financial products and services, protection of consumer assets against fraud and misuse, data privacy and protection, and the timely handling and redress of complaints are strengthened.

According to the FCPA, “these mechanisms reinforce their confidence in the financial market and foster the stability of the Philippine financial system.”

The Power and Responsibilities of Financial Regulators

The law also gives the Bangko Sentral ng Pilipinas (BSP), Securities and Exchange Commission (SEC), and Insurance Commission (IC) authority to enforce the law’s provisions on all financial service providers.

These financial regulators are allowed to craft their own standards and rules for specific financial products or services—provided that they follow internationally-accepted standards and practices. Likewise, they can conduct surveillance, examine financial service providers, and request reports if needed.

Under the law, financial regulators can restrict the collection of excessive or unreasonable fees by service providers, disqualify directors, officers and employees, and suspend a company’s operation—should they violate what is stipulated in the FCPA. In fact, they can issue cease-and-desist orders against financial service providers that commit fraud, violate the law, or “cause grave or irreparable injury or prejudice to financial consumers.”

Meanwhile, financial regulators need to also determine things like the reasonableness of interest charges or fees that a financial service provider may demand, collect or receive for its services.

Protection Against Fraud

As for people who have fallen victim to scams—when their hard-earned money is illegally taken from them—financial regulators are now given adjudicatory powers that allow for the reimbursement of lost funds, not exceeding PHP 10 million. This allows regulators to “resolve the challenges faced by financial consumers in a timely manner.”

And with that comes the task of providing efficient and effective mechanisms to address and handle complaints, requests, and inquiries from financial consumers.

“The law arms regulators [need] sufficient authority in effectively preventing fraud and addressing consumer issues, especially as more turn to digital services,” says Senator Mary Grace Natividad S. Poe-Llamanzares—current chair of the Senate Committee on Banks and one of the law’s proponents—in a statement. Thus, the operations of erring financial service providers can be suspended, while requiring the reimbursement of lost money.

“We authored this measure and saw its passage through as its sponsor to ensure a heightened level of protection for all consumers,” she adds. “Transactions—big or small—deserve quality and prompt attention.”

Photos from Unsplash.com

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