The Bangko Sentral ng Pilipinas (BSP) is reminding all its BSP-supervised institutions (BSIs) to fully comply with the Consumer Protection Standard of Conduct on the Protection of Consumer Assets Against Fraud and Misuse as per BSP rules based on the regulations of Republic Act (RA) No. 11765, otherwise known as the "Financial Products and Services Consumer Protection Act” (FCPA).
In a memo (BSP Memorandum No. M-2024-030) signed by BSP Deputy Governor Bernadette Romulo-Puyat on Sept. 24, 2024, the BSP said BSIs must provide the necessary assistance to mitigate the risk of fraud and misuse faced by financial consumers.
“Further, BSIs must provide clear information on the actions taken or to be taken on a complaint, inquiry or request from a financial consumer involving fraudulent or unauthorized transactions,” said Romulo-Puyat.
She said all this are set in a circular to ensure full compliance to the FCPA provisions. The BSP’s Monetary Board on Nov. 28, 2022 issued Circular No. 1160 to implement the FCPA.
Romulo-Puyat also reminded BSIs to implement claims assessment and investigation and to carefully review any disputed transactions to resolve the claim and to assess the parties’ liability according to the law.
“BSIs should resolve a claim in a fair and reasonable manner. The claim resolution process should also be communicated to the account holder in a timely and transparent manner,” she said, adding that fraud-related concerns “should be given utmost priority and should be resolved within a reasonable time commensurate to the complexity of the circumstances.”
To this end, financial consumers should be given the appropriate reporting channels on a 24/7 basis. And, within three banking days from the conclusion of the investigation, the BSI must inform the client formally of the result, said the BSP.
In 2022, the BSP approved new rules to protect the interest of consumers of financial products and services through the effective handling of complaints and disputes. This was issued via Circular No. 1160 based on the FCPA which was made into a law two years ago.
The FCPA, which improves procedures for the consumer assistance mechanism, mediation and adjudication of cases in the BSP, is expected to lead to a stronger banking system.
The significance of the pro-consumer law, besides BSP improving its complaints handling mechanism, is that its consumer redress includes central bank’s capability to adjudicate or pronounce judgement in connection with financial transactions. With this power, the BSP can order the reimbursement of a sum of money not exceeding P10 million.
The circular covers all financial products and services by BSIs such as deposits, investments, fund transfers, trust products, loans, payments, remittances, and the other broad range of financial products or services accessed and delivered through digital channels.
Under the circular, BSIs are required to put up a consumer protection risk management system and to follow the standards of disclosure and transparency. It also includes fair treatment to guard against discriminatory practices as well as the protection of client data as per the Data Privacy Act and effective recourse for handling clients’ complaints.
The FCPA-compliant rules and regulations also directs BSIs to do the following: practice responsible pricing of its products and services; provide cooling-off periods which allow BSI clients to consider costs and risks of financial products and services without pressure; and setup a 24/7 channel for reporting of fraud or misuse.