MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) no longer allows banks and financial institutions to let customers sign a waiver of rights, extend the statute of limitations, and seek protection of customer data, as the regulator further strengthens the protection of financial consumers.
The regulator is finalizing financial consumer protection guidelines to implement Republic Act 11765 or the Financial Products and Services Consumer Protection Act of 2022.
“It is the policy of the State to ensure that appropriate mechanisms are in place to protect the interests of consumers of financial products and services under conditions of transparency, fair and sound market conduct and fair treatment. , reasonable and effective consumer financial disputes, which are aligned with global best practices,” BSP Governor Benjamin Diokno said in a draft circular.
Diokno said these mechanisms build consumer confidence in the financial market and promote stability in the Philippine financial system.
Financial institutions supervised by the BSP (BFSI) are expected to implement measures to safeguard the right of financial consumers to fair and equitable treatment, the right to disclosure and transparency of financial products and services, as well as the right to the protection of consumer assets against fraud and misuse.
Banks and financial institutions are also required to implement measures to protect consumers’ right to privacy and data protection, as well as the right to timely handling and redress of complaints.
“The purpose of these rules is for OSFIs to manage consumer risk and potential harm to financial consumers, prevent unfair business practices, achieve fair and beneficial outcomes for consumers, and empower consumers,” Diokno said.
On the one hand, the BSP stated in the draft circular that no provision of a contract for a financial product or service is lawful or enforceable if that provision waives or otherwise deprives a customer of a legal right to sue banks and financial institutions, to receive information, have their complaints handled and resolved, or have their non-public customer data protected.
Likewise, the regulator said that all actions or claims arising from the provisions of the new law become statute-barred after five years from the completion of the consumer financial transaction or after five years from the discovery of the deception or non-disclosure of material facts,
“Provided that such actions are, in any event, time-barred after 10 years from the commission of such violation,” the BSP added in the draft circular.
According to the central bank, it continues to provide an effective consumer redress or complaint mechanism through the BSP Consumer Assistance Mechanism (CAM), mediation, conciliation or other means of settlement. out-of-court litigation to resolve financial consumer conflicts arising from financial products or services.
It has the power to rule on all actions arising from financial transactions of a purely civil nature with requests for payment or reimbursement of money not exceeding 10 million pesos.
“The decision of the BSP in the arbitration is final and binding and may not be limited or set aside by the court, except on application for certiorari for gross abuse of discretion or absence or excess of jurisdiction of the BSP “, he said.
He added that the aggrieved party of the ruling can only file a petition for certiorari within 10 days of receiving the ruling, provided that, in the case of BSP, the aggrieved party can file the petition with the Court. call.
According to the proposed guidelines, the PASB should develop and implement a framework for monitoring business practices as well as conduct onsite or offsite monitoring and review to ensure that consumer protection provisions are being adhered to. .
On the other hand, OSFIs are required to establish a one-stop consumer assistance mechanism or a financial consumer protection assistance mechanism to deal with customer complaints, inquiries and requests.
The BSP warned that it would exercise its powers, including restricting the ability of OSFIs to continue to collect excessive or unreasonable interest, fees or charges; disqualify or suspend directors, trustees, officers and employees of OSFIs, impose fines, suspensions or sanctions for non-compliance; issue a cease and desist order; and suspend the operation of any OSFI in relation to a particular financial product or service.