By Ben Rosario
The House of Representatives has passed on second reading a bill proposing to further protect the rights of financial consumers and safeguard them from investment fraud and other unfair practices.
House Bill (HB) No. 6768, or the Financial Products and Services Consumer Protection Act, is expected to be passed on third and final reading before Congress adjourns session next week.
HB 6768 consolidates legislative proposals filed by Reps. Junie Cua (NP, Quirino); Joey Sarte Salceda (PDP-Laban, Albay) and Ferdinand Hernandez (PDP-Laban, South Cotabato), among other authors.
Under the bill, financial consumers are persons or entities who are purchasers, lessees, or recipients of financial products or services that refer to savings, credit, insurance, pre-need, and health maintenance organization products and investments.
The Bangko Sentral ng Pilipinas, Securities and Exchange Commission, and Insurance Commission have been designated in the bill as financial regulators.
The Cooperative Development Authority is also included as a regulator concerned with the operations of cooperatives offering financial products and services.
Hernandez, a deputy speaker, noted that these agencies are already empowered to regulate transactions involving financial products and services but “there are gaps within and between these laws” they are implementing and these are being exploited by some financial providers.
Hernandez said the bill provides for “additional duties for financial service providers” which include ensuring transparency, reasonable pricing, non-discrimination based on unreasonable criteria, and privacy protection.
Financial regulators are empowered to formulate their own rules and standards in applying the provisions of the measure. They are also authorized to conduct market surveillance, monitoring and examination, and enforcement.
Further, financial regulators must provide for a consumer redress mechanism and adjudicate issues pertaining to the consumer and the providers.
The bill prohibits contractual stipulations on waiver of rights to sue, receive information, to seek recourse for complaints, to enforce data privacy, or cancel a contract without incurring unreasonable penalty.
Penalties for violation of the provisions of the measure include imprisonment ranging from one year to five years and a fine of not more than P2 million.
Administrative sanctions may also be imposed as provided by the charters of the financial regulators.
The legislative proposal grants a five-year prescription period for the filing of complaints against erring service providers. The period starts from the time deceit or non-disclosure of material fact was discovered, or from the time the financial consumer transaction was consummated.