Government Approves Law Protecting Financial Consumers in the Philippines
The Duterte administration signed a new law that will further protect financial consumers from cybercrimes.
Republic Act (RA) No. 11765, or the “Financial Products and Services Consumer Protection Act,” which was recently signed recognizes that the state must apply measures to protect consumers’ rights, such as:
- Right to equitable and fair treatment
- Right to disclosure and transparency of financial products and services
- Right to protection of consumer assets against fraud and misuse
- Right to data privacy and protection
- Right to timely handling and redress of complaints
Based on the law, “It is the policy of the state to ensure that appropriate mechanisms are in place to protect the interest of consumers of financial products and services under the conditions of transparency, fair, and sound market conduct, and fair, reasonable, and effective handling of financial consumer disputes, which are aligned with global best practices.”
This mechanism strengthens their confidence in the financial market and fosters the stability of the Philippine financial system.
RA 11765 grants financial regulators the authority to make their own standards and regulations of business conduct for financial companies.
Under the law, it states that “Financial regulators may also determine reasonableness of interest, charges or fees which a financial service provider may demand, collect, or receive for any service or product offered to a financial consumer. Likewise, they may issue their respective rules of procedure concerning administrative actions arising from the implementation of this act.”
The law also grants financial regulators authority to impose enforcement actions on their respective supervised financial service providers for reasons such as non-compliance with the act and other existing laws pertinent to the jurisdiction and authority of the respective financial regulators.
Financial regulators will also have the authority to resolve reimbursement of lost funds within a certain threshold.
The law states that financial regulators must prepare necessary regulations to implement the provisions of this act within one year from its effectivity.
Financial consumers refer to people, entities or duly appointed representatives, who are purchasers, lessees, recipients, or prospective purchasers, lessees or recipients of financial products or services.
On the other hand, financial regulators refer to the Bangko Sentral ng Pilipinas (BSP), Securities and Exchange Commission (SEC), Insurance Commission (IC), and the Cooperative Development Authority (CDA).