REGULATORS are backing a measure that seeks to enhance financial consumer protection amid a rise in cybercrime incidents as more Filipinos used digital financial services during the pandemic.
This as the Bangko Sentral ng Pilipinas (BSP) reported the declared amount in consumer complaints reached P2 billion from 2019 to 2021.
The proposed Financial Consumer Protection Act (FCPA) will provide government agencies and financial regulators with the legal authority to enforce prudent, responsible, and customer-centric standards of business conduct, said BSP Governor Benjamin E. Diokno during a Senate Committee on Banks, Financial Institutions and Currencies hearing on Monday.
The measure will provide consumers with more efficient avenues for redress by granting regulators, including the BSP and the Securities and Exchange Commission (SEC), with adjudicatory authority to conduct hearings on consumer complaints.
“Consumer complaints can be escalated and resolved at the level of the financial regulators, ensuring quick resolutions, hence de-clogging court dockets,” Mr. Diokno said.
Mr. Diokno said 42,456 complaints were elevated to the BSP Consumer Assistance Mechanism in 2020 and 2021. “A majority of these cases have been deemed closed, but the process was long and arduous and for many complaints, the resolutions were unfavorable to the consumer,” he said.
SEC Commissioner Ephyro Luis B. Amatong said the regulator issued 241 advisories, 20 cease-and-desist orders, and 14 orders of revocation of certificates or registration against firms during the pandemic.
“Among the serious challenges encountered in the prosecution of criminal cases against these scammers is the lack or absence of complainants who are willing to stand as witnesses in these cases,” he said during the same hearing.
“Unlike in the US (United States) where the SEC which has the express authority to compel the return of funds obtained by violators of securities laws as part of their enforcement action, our Securities Regulation Code does not provide for a similar authority for our commission.”
Mr. Amatong said this means that victims of investment scams have to file estafa cases on their own to recover their money.
Under the proposed FCPA, the SEC can file cases to recover the funds for and on behalf of the victims of investment scams, and issue an order directing scammers to return the investments of their victims.
The measure also proposes to give the SEC the authority to supervise and regulate investment advisers.
Mr. Amatong called this an “additional layer of investor protection” as it ensures only qualified and licensed persons may provide investment advisory services for a fee or for compensation thus “eliminating the observed modus of scammers posing as so-called investment gurus.”
“Without doubt, if properly and swiftly implemented, this act will reinforce the trust and confidence of the public in the financial system, and in the government’s ability to uphold consumer welfare,” said Mr. Diokno.
Senator Mary Grace Natividad S. Poe-Llamanzares, chairman of the Committee on Banks, Financial Institutions and Currencies, is seeking to sponsor the proposed measure at the plenary next week.
Ms. Poe-Llamanzares authored Senate Bill 1739 or the proposed FCPA, which will cover all financial products or services developed or marketed by financial service providers, such as savings, credit, insurance, and remittances. — Alyssa Nicole O. Tan