We welcome the passage of a law to protect consumers from financial fraud by giving regulators more powers.
Republic Act No. 11765, signed by the President on May 6, aims to strengthen the rights of Filipino consumers to equitable and fair treatment, disclosure and transparency of financial products and services, protection of consumer assets against fraud and misuse, data privacy and protection, and the timely handling and redress of complaints.
Under the new law, financial regulators can craft their own standards and rules for specific financial products or services within their jurisdiction, guided by internationally accepted standards and practices.
Financial regulators can also conduct surveillance and examination of financial service providers, as well as require the submission of reports.
Financial regulators will also be able to restrict the collection of excessive or unreasonable fees by service providers, and disqualify directors, officers and employees, as well as suspend a company’s operations, if they violate the law.
They may fine and suspend companies that violate the law, and issue cease-and-desist orders against financial service providers that commit fraud, violate the law or “cause grave or irreparable injury or prejudice to financial consumers.”
Financial regulators will have adjudicatory powers to order the reimbursement of lost funds not exceeding P10 million, allowing regulators to “resolve the challenges faced by financial consumers in a timely manner.”
They are tasked to determine the reasonableness of interest charges or fees that a financial service provider may demand, collect, or receive for a service.
They must also provide efficient and effective mechanisms to address and handle complaints, requests and inquiries from financial consumers.
The passage of the law is timely.
In 2020 and 2021, the central bank received more than 42,000 complaints through its Consumer Assistance Mechanism. The total amount involved in the 2021 complaints amounted to P540 million, bringing the total from 2019 to P2 billion.
Identity theft, phishing and social engineering schemes were the top three cybercrimes in 2020.
While the new law is laudable, more needs to be done to provide consumers with the basic protections they deserve, not just in financial transactions, but in commercial ones as well.
Consider, if you will, the hapless consumers of home internet services, who continue to remain at the mercy of their service providers, who offer no reasonable guarantee of continuous service, or of a swift resolution of problems. These so-called service providers are quick to bill and quick to disconnect upon non-payment, but are glacially slow in providing decent customer and repair service.
The addition of a third telco has done nothing to spur competition or improve customer service.
The recent experience of one Quezon City service area, is instructive. Here, the dominant internet service provider, PLDT, has not repaired downed broadband fiber connections for five days and counting, despite system-generated messages saying they were working on it. But not only is the company slow in repairing its network, it makes it difficult for its customers to get the rebate they are owed for lost service days. If customers want a rebate, they must fill out a form at a PLDT office—where the lines at the “customer service” counters are long. The hapless customers cannot even vote with their wallets, thanks to long lock-in periods that penalize them for switching to another provider.
As the 19th Congress begins, lawmakers could do worse than to legislate better protection for consumers against such poor service.