M-2024-030: Protection of Consumer Assets Against Fraud and Misuse Provisions of BSP Circular No. 1160, Series of 2022

To
BANGKO SENTRAL NG PILIPINAS
OFFICE OF THE DEPUTY GOVERNOR I REGIONAL OPERATIONS AND ADVOCACY SECTOR Subject All Bangko Sentra/-Supervised Institutions IBSls) are advised to ensure full compliance with the Consumer Protection Standard of Conduct on the Protection of Consumer Assets Against Fraud and Misuse, as provided under Bangko Sentra/rig Pill/?Iha$ (BSP) Circular No. 1160. Series of 2022. or the Regulations on Financial Consumer Protection to implement Republic Act (RA) No. 11765, otherwise known as the "Financial Products and Services Consumer Protection Act, " The pertinent provisions of this circular are reproduced below:
Protection of Consumer Assets Against Fraud and Mts"se. 70 mr't, ^ate the r, :sks of fraud and infouse faced by Finencb/ Consumers, BSI$ to the extent allowed by ex/^tihg laws. rules and regulatibns. must provide necessary asststance^hc/ud, hg the prov/s, bn offelevent, h, brrnat, bn relating to fraudulent orunauthori:z. ed transactions Further BSIs must provide clear informatibn on the actibns taken or to be taken on a complaint Ihquiiy or request from a Fibancia/ Consumer involving fraudulent of uriauthori:2.0d transactibns. 85/5sha//adequately, hform Fibanc, a/ Consumers @1thei7 responsiblyflies as users of 17nanc, ^/ products and services, and provide timely transaction noti:ficatibns whiz. h are essential Ih curter71ng and detect, hg fraudulent or unauthorized transact, bn$. MEMORANDUM No. M-2024-030 All Bangko Sentral-Supervised Institutions Protection of Consumer Assets Against Fraud and Misuse Provisions of BSP Circular No. 1.60, Series of 2022 ClaimsAssessme"tend, ,, vest^ation. A BSI should evaluate anyc/aim made by any accountho/der in Febt/bn to any di:sputed transaction for purposes of reso/v, hg the c^17n or assess, hg the partr^s' nabi"'^y in accordance with the FCP Framework. and other ex/:stihg laws. rules and legu/atIbns 8515 should resolve a c/elm In a I^,} and reasonable manner The claim reso/utrbn process should atso be communicated to the accountho/der in a timely and transparent manner Fraud-related concernsshou/dbegiven utmostpribrityandshou/dbereso/ved wi'thih a reasonabfo tr7, ,e coinmensurate to the complex/'tvofthe c, 7. cumstances. Reporting Channels BSIs shoukiprov, de I'ts C/I^nts w/'th a free and active reportihg channe*3' wh^ch may consist of a manned phone libe, mobile number on//he portal email chatbot; instant messeg, hg. or other closely-mom'tored coinmumt:at, bn channets whiz!h shoukibe avar7ab/e on a 2417'basi^. Any F1hanc, ^/ Consumer who contacts the reporting channel should feee^ve an finmedbte written acknowledgement through the same channel Uria", fogr^ed Transactions, ' Concerns or disputes about fund transfors or a\eged unauthorized transactions shall be filed with the 01,191hatihg Financial Inst, 'tutrbn 10F// The OF/ ts primal, :ly responsible for providing asststance and redress to Its C/^^nt$ These Guidelines should be read in conjunction with existing regulations on IT Risk Management S stem. Standards and Guidelines. BSP Circular 1140. Series of 2022. and regulations on National Retail Payments Systems. and other relevant rules and regulations

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Upon feeejot of fund transit^I dtsputes of alleged uriauthor/:2'ed transactibns, the OF/ shall 17nmedi^tely Ih/brm and provide relevant details to the Receiv/hg Finenc/^/ Institutibn IPF// OF/s and RFls should then Implement the following, pend/hg the result of the Ihvestjg, at/bn of the d/:sipute oral/egatibn:
Suspend the Imposition of Ihterest foes orchaiges. napp/^^able; Hold the disputed funds, 11st/7/1htact, Ih coinp/kirice wi'th BSIpo//a^, s, exist/hg Bangko Sentra/rules andregu/atIbns, o11ndustiy conventibns;
c. Provide reasonable accommodations to the F1hancia/ Consumer such as a nori￾wi'thdrawab/e prow:510na/ credit of the d, ^puted amount or temporary bob of
the dtsputedamount withIh a 91'yen periodas determined by the BSI. and Perform such other necessary actions to protect the Finenc/^/ Consumer^ interest and/'or assets, such as but not limited to, account blockihg or freez/hg of funds. Within three 131 bank/hg days from the conc/us/bn of the Invest/!gat/bn, the BSI must inform the C#entibrma/{yofthe result The informat/bnshou/dinc/ude. among others, a not/fibat/bn of debiting the provisionally-credited amountiftherei3 sufi7cit?ntproof that no unauthorized or erroneous transaction occurred Ifaft'er the investbat/'on, the di^puted transactibn I^ found to be an unauthorized or fraudulent transact/bn, the BSIshou/dimmed/ately. a. Correct or reverse the transactJbn found to be uriauthori:a. ed or fraudulent, includihg any related interest, charges andit;^esih7posed thereon: and, ,"or b. Makepermanent the provi:SIbna/{y-credi'ted amount, Irany Sub/^^ct to propoitibna//tvpr/hc/;o1e, BSIs should Implement fraud test mechantsms or measures under then CPRMS to d/:stingu/:sh fraudulent from legitimate transactions Ubbiffty for /@$5es artsing ,?Din uriauthoriz. ed transactions. In determrhih 1119b/711 tollosse$ 85/5 maycons/der among others, the follow/hg 1:9ctors:
a. Actibns of the accountho/der before. dullhg and after the uriauthori:Bed transact/'on. - Acts or Qini3s/bns of the BSI Its employees, third-party agent outsourced entity o15erv/I:eprov/der act/hg on behalfofthe BSI. and/61
c. Non-coinp//lance by the BSI I'ts employees, agents or service providers, with
any requirement under the FCP Framework and other existing rules end legu/at/bnsapp/ICab/e to the BSI^prov/:510n of any/7nancb/productorserv/I:e. Please also be informed that RA No. 12010. otherwise known as the "Anti-Financial Account Scamming Act (AFASA)," took effect on 13 August 2024. Section 7 of this law provides BSIs' authority to temporarily hold the funds subject of a disputed transaction for a period not exceeding 30 calendar days under certain grounds. Thus:
Section Z Temporary Hold/hg of Funds Su4!^ICt of a Dtsputed Transact/bn. -
Institut/bns shall have the author/'tv to temporarily hold the funds su4/^ct of a di^pured transactibn with/h the perlbdprescribed by the BSA whichsha//not exceed th/Icy (30) calendar days, unless otherwise extended by a court of competent lull:s^diction. . Provided That Inst/'tut/bn$ shall promptly not/61 the BSP whenever it temporal/7y holds the funds su4/t?ct of a disputed transact/bn. A transactibn shall be considered disputed If the Institutibn, based on Ihibrmation obtained from another Institutibn, a coinp/a/ht from an 8991/evedpart!4 or a fibdrhg under It's own FMS IFraud Management system/ has reasonable ground to bell^Me that such transact/bn appeals to be:
a/ Unusual b/ Pill'thout clear econom/t:^ purpose, . c/ From an unknown offnega/source, of unlawful actiVi'04. or d/ Faci/^^ated through SOC/;,/ eng/heerih9 schemes. a. b. d b.
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Where such be fief arises from a findihg under Its own FMS, the Institut/bn shall perform acts as may be legally warranted to preserve the inte9r/tv of the F1hancia/ A ccoun t For information and guidance. 2:11_ Septem ber 2024 BERNA E D u Go LO. PUYAT rnor/