The House Committee on Banks and Financial Intermediaries has approved in principle the substitute bill that proposes to regulate the use of bank accounts and E-wallets, stressing the prohibition on their use for unusual and suspicious financial activity.
In the substitute bill, a bank account is defined as one referring to an interest or non-interest bearing deposit, trust, investment and other transaction account maintained with a bank or a financial institution.
On the other hand E-wallet refers to a digital value stored in either a software or application which the users can use for financial transactions such as payments, fund transfers, top-ups or cash in and/or withdrawals.
Examples of E-wallets are E-money or virtual asset acconts stored in mobile and web-based apps.
In filing House Bill 10141, Villafuerte underscored the immediate need for a law that would regulate bank accounts and E-wallets in view of the increased incidence of cybercrimes.
Because of the “deleterious effect” of unlawful cyber activities, to the country’s economy, Villafuerte proposed that violation of provisions of his bill when done in bulk or in large scale, will already be considered as a form of economic sabotage and a heinous crime.
Like Villafuerte’s bill, Cabochan’s proposal, filed as HB 10412, will penalize money mules and social engineering schemes or phishing that would lead to illegal online financial activities.
“It is paramount, therefore, that digital financial services must be regulated to ensure the safety of the public and to strengthen the financial system’s defense against cyber criminals,” said Cabochan.
The committee supported the amendments introduced by the Bangko Sentral ng Pilipinas.
BSP Technology Risk and Innovation Supervision Department Director Melchor Plabasan said the changes they made were essentially intended to make the bill clearer and consistent with other regulations or laws.
Among the amendments were the change in the title of the bill which reads “An Act Regulating the Use of Bank Accounts, E-Wallets, and other Financial Accounts”; added definition of “E-wallet”; redefinition of “money mule”; and deletion of the term “phishing” to be replaced with the term “social engineering scheme” on all referring to phishing in the bill.
Activities of a money mule have been declared illegal under the substitute bill.
Social engineering schemes are also penalized. Such activities include making any electronic communication to another person disguising as a trusted person or with the intent ot defraud or injure any person, uses electronic communications to induce or request any person to provide sensitive identifying information.
` Economic sabotage is present if the offense was committed by a syndicate; in large scale or by using a Mass Mailer.
Also to be penalized are persons who willfully abet or aid int he commission of any of the prohibited offenses or one who willfully attempts to commit any of the said wrongdoing.