Senate bill seeks to counter consumer fraud and abuse
A MEASURE giving more power to financial regulators to counter consumer fraud and abuse in availing financial products has been filed in the Senate.
Under Senate Bill No. 1329, or the “Financial Consumer Protection Act of 2020,” Senator Juan Edgardo M. Angara seeks to address crimes that go with the development of complex financial products.
“Time and again, we hear stories of consumers putting their lifelong savings in investment scams or suffering from or facing collection cases due to over indebtedness,” he said in the bill’s explanatory note.
The measure recognizes as regulators the Bangko Sentral ng Pilipinas, Securities and Exchange Commission, Insurance Commission and the Cooperative Development Authority.
These regulators are given the authority to impose policies, conduct surveillance and examination, and monitor the financial market.
Further, the regulators will also be authorized to adjudicate on claims or relief prayed for by financial consumers worth up to P100,000.
Mr. Angara also proposed penalizing financial service providers with a fine ranging from P50,000 to P2 million, imprisonment of 1-5 years, or both.
The bill says in case “profit is gained or loss is avoided as a result of the violation, a fine of no more than three times the profit gained or loss avoided may also be imposed.”
The measure will also subject the provider to administrative sanctions and may, at the recommendation of the financial regulators, be ordered suspended or canceled.
The bill, among others, mandates that financial service providers should design financial products appropriate to their target consumers. This includes ensuring the product’s affordability and suitability to the client.
The provider should also grant a clear cooling-off period, allowing the consumer to consider the cost and the risk and decide whether to cancel the contract without penalty unless the product is a contact of insurance, which cannot be returned.
Moreover, the bill noted that financial contracts will be declared illegal if they carry a provision that waives a client’s right to “sue the financial service provider, receive information, have their complaints addressed and resolved,” among others. — C.A. Tadalan
