House committee approves bill that will provide stronger consumer protection

Published November 13, 2018, 4:17 PM

by Francine Ciasico

By Charissa Luci-Atienza

The House Committee on Banks and Financial Intermediaries, chaired by Leyte Rep. Henry Ong, passed yesterday a bill seeking a comprehensive financial consumer protection regime by upgrading the powers of financial sector regulators.

Leyte Rep. Henry Ong (Congress/ MANILA BULLETIN)
Leyte Rep. Henry Ong (Congress/ MANILA BULLETIN)

House Bill 8301 calls for transparency, responsible pricing, privacy rights protection and product bundling measures, Ong, author of the bill, said.

“House Bill 8301 empowers consumers and regulatory agencies. Consumers can dissect bundled products and pricing details, and are given a cooling off period during which they can cancel or return the contract entered into without penalty, not including the processing fees,” he said.

He said under HB 8301, financial regulators such as the Bangko Sentral ng Pilipinas (BSP), Securities and Exchange Commission (SEC), Insurance Commission (IC), and Cooperative Development Authority (CDA) shall be granted rulemaking, surveillance and inspection, market monitoring, and enforcement powers relative to consumer protection.

“Kapag ganap nang naisabatas ang Financial Consumer Protection Bill, agad nang makakahingi ng tulong ang publiko sa BSP, SEC, at IC para sa anumang reklamo kontra sa mga kumpanya at kanilang pinansyal na produkto at serbisyo,” Ong said.

“The regulators are empowered to issue cease and desist orders without the necessity of a prior hearing to avoid grave and irreparable injury to the consumer,” he added.

Ong said the bill places investment advisers under the regulatory jurisdiction of the SEC.

“The advent of the global financial crisis brought to the fore the importance of an effective consumer protection in the financial services as consumers were ultimately exposed to the risks brought about by the failure of financial institutions, ” he said in filing the proposed Financial Consumer Protection Act of 2018.

“The evolution of the financial landscape where there is an increasing number of complex financial products and services coupled with the rapid technological change highlight the need for financial consumer protection,” Ong said.

He said as more complex financial products are being offered to the public, and easily accessed through financial technology, financial consumers face the risk of being the victims of fraud and abuse.

“Better consumer protection requires modern and continually evolving regulatory authority and tools which can be used swiftly. This we provide in House Bill 8301,” Ong said.

Covered by the bill are all financial products and services offered and marketed by any financial person.

“We now have new products previous generations did not encounter before. There are state-of-the-art and state-of-the-tech ways of providing financial services. These products and services have been much more complex that Filipinos need much better financial literacy and safeguards against abuse and scams,” he pointed out.

He said the bill was aimed at putting in place a comprehensive financial consumer protection regime wherein financial inclusion, financial education, good governance and effective supervision all come into play.

“Many financial transactions now happen at the speed of light because of fiber optics technology. The regulatory agencies must also have mechanisms to make sure consumers and investors are protected while those lightning-speed transactions happen,” the House leader said.

HB 8301 provides parameters and guidelines and entrusts to the regulators the details of how they shall wield their powers, Ong said.

“It is the policy of the State to ensure that appropriate mechanisms are in place to protect the interest of financial consumers under the conditions of transparency, fair and sound market conduct, and fair, reasonable and effective handling of financial consumer disputes, which are aligned with global best practices, ” he said.