By Lee C. Chipongian
The Bangko Sentral ng Pilipinas (BSP) received and processed 43,115 new consumer complaints in 2023, almost double the 22,142 in 2022, as the central bank improved its capacity to act on more financial consumer issues after streamlining consumer redress measures and market conduct monitoring last year.
The new complaints collected by the BSP via the consumer assistance mechanism (CAM) was 95 percent higher year-on-year.
Around 87.4 percent of 43,115 new complaints were initially received and processed through the BSP’s consumer chatbot “BSP Online Buddy” or BOB which went live during the first year of the pandemic in 2020.
By end-December 2023, the BSP escalated 322 cases from the CAM to mediation.
“Of these cases, 69.4 percent were successfully mediated, while 30.6 percent were considered failed,” said the BSP in a report. The reasons for terminating mediation include non-response from an involved party or the complainant cancelled the case even before the BSP started proceedings.
Other cases were terminated due to the request of the complainant while five mediation cases are ongoing as of the second quarter of 2023. “The success of mediation proceedings depends on the willingness of involved parties to settle into an amicable agreement,” said the BSP.
Meanwhile, 11 cases were filed for BSP adjudication of which one case is in process; four were dismissed without prejudice; and six were concluded with a decision.
BSP’s consumer assistance were given more teeth with the passage into law of Republic Act No. 11765 or the Financial Products and Services Consumer Protection Act (FCPA) on May 6, 2022. The law grants the central bank an “expanded legal authority to perform market conduct supervision and ensure financial consumer protection.”
To implement FCPA, the BSP issued Circular No. 1160 on Nov. 28, 2022 and Circular No. 1169 on March 24, 2023.
The 2023 circular provides the rules for CAM, mediation, and adjudication of complaints escalated by consumers to the BSP of issues and disputes of consumers who bought financial products or services from BSP-supervised institutions (BSI).
Under the FCPA, a BSI is required to have its own financial consumer protection assistance mechanism (FCPAM) as an internal system for addressing consumer complaints and inquiries, said the BSP. “This mechanism serves as the first level of recourse for aggrieved financial consumers,” it said.
However, the BSP said “concerns that are not resolved at the first level warrant escalation to the BSP (and) these can be filed to the CAM for assistance facilitation. The CAM is the second level of recourse that the BSP provides for financial consumers.”
With CAM, the process involves giving a BSI “another opportunity to clarify their positions on consumer concerns” that did not get resolved through their FCPAMs. “If a complaint remains unresolved after a series of two clarifications from the BSIs, the case is terminated under the CAM,” said the BSP.
In addition, the BSP noted that once a complaint is terminated under the CAM, unresolved concerns will go through levels of the consumer redress such as mediation and adjudication.
“Mediation is an intervention conducted by a duly authorized central bank mediation officer to assist involved parties in reaching a mutually acceptable settlement. It is a voluntary and strictly confidential process. A complaint escalating from the CAM to mediation is triggered by a complainant’s express written consent,” explained the BSP.
Meanwhile, adjudication is a quasi-judicial procedure for financial consumer complaints from financial transactions.
“Complaints that do not meet these conditions fall outside the scope of adjudication; hence, the next recourse for consumers would be the regular courts,” said the BSP.
BOB and the CAM are part of the central bank’s financial services innovations to use technology for an accessible, continuous, timely and efficient platform for escalating complaints against BSIs.
The CAM is basically a second-level recourse for complainants who first reported their issues to the BSI but was not satisfied in how the BSI handled their concerns.
As to the mediation period, this will be for 30 days. However for “meritorious reasons and as agreed upon by the parties, a longer period may be allowed.”
For the adjudication proceedings, this will only be conducted in-person or face-to-face. But, the BSP will permit virtual or online hearing when appropriate.
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 “purely civil in nature” financial transactions. With this power, the BSP can order the reimbursement of a sum of money not exceeding P10 million.