Banks could face sanctions, charges for failure to update fraud management systems
THE BANGKO Sentral ng Pilipinas (BSP) could impose both civil and administrative sanctions and penalties against banks that are unable to comply with the new fraud management system (FMS) requirements under the Anti-Financial Account Scamming Act (AFASA).
“There is what we call the civil aspect, where a scam victim will be adjudicated by the BSP and we act like a judge. Now, on top of that, I can complain to BSP that my bank is violating rules. In that case, the bank can be held administratively liable. These are separate procedures,” BSP Deputy Governor Elmore O. Capule told reporters last week.
The BSP has given banks until June 25, 2026 to adopt new fraud management systems, as well as upgraded security and authentication measures for consumers. Lenders were also given six months to update their risk management frameworks in line with the AFASA’s implementing rules.
Mr. Capule said the BSP could suspend a bank’s license if they are unable to comply with updated FMS requirements by the deadline.
“Number one, remember, we are the regulator of banks. We are supposed to ensure that the banks comply with our regulations. So, if they fail, administratively, we can hold them liable. We can impose fines, penalties, even suspension of license. That’s possible,” he said.
Mr. Capule added that under the Financial Products and Services Consumer Protection Act, clients can also hold their banks liable for restitution if they are scammed and the financial institution is found to have an outdated fraud management system.
“What this means is, if I am a client, and I get scammed, and then it turns out they are not complying with this fraud management system, they will now be obliged to repay me. I don’t have to go after the scammer — I go after the bank. I was scammed because [their] system is totally inadequate to save me. Remember, that is their product,” he said.
“If I establish that my bank is not compliant with that requirement, that’s all I have to prove.”
In this kind of case, Mr. Capule said the BSP will act as an adjudicator and determine through a hearing if they will obligate the bank to repay the victim.
Asked if the central bank would be willing to extend the FMS compliance deadline, he said they will have to monitor industry developments,
“We will find out after one year. But for now, banks are treating it seriously because they have to spend a lot of money for that. After one year, it will be hard for the BSP to say we will extend it because there are people getting victimized by scams,” Mr. Capule said.
“So, if we will extend it, they can tell us, you’re not protecting the public.” — A.M.C. Sy
