BSP orders tighter fraud protection

ALL Bangko Sentral-supervised institutions (BSIs) have been directed to comply with enhanced consumer protection measures to safeguard them against fraud and misuse of financial assets.

Under Bangko Sentral ng Pilipinas (BSP) Circular 1160, Series of 2022, the central bank required all BSIs to promptly inform consumers of actions taken to address unauthorized transactions and provide the necessary support.

It also mandated a fair and timely resolution process for disputed transactions with fraud-related cases to be prioritized. Institutions must maintain 24/7 reporting channels to ensure immediate responses to complaints.

The central bank said that any financial consumer who uses the reporting channel must receive an immediate written acknowledgment through the same channel.

When a fund transfer dispute or unauthorized transaction is reported, the originating financial institution must promptly notify the receiving financial institution and take actions such as suspending interest charges or fees, holding the disputed funds, and providing provisional credit if needed.

Both institutions should prioritize consumer protection while the investigation is ongoing.

Within three banking days of completing the investigation, the consumer must be informed of the result. If the transaction is confirmed to be fraudulent, the originating institution must reverse the transaction or make any provisional credit permanent.

BSP Deputy Governor Bernadette Romulo-Puyat said that BSIs should also take steps like suspending interest charges on disputed funds and providing provisional credit if necessary.

The guidelines are in line with the Anti-Financial Account Scamming Act (RA 12010), which allows for a temporary hold on disputed funds for up to 30 days.

BSIs are also expected to integrate these regulations with existing information technology risk management and payment systems guidelines.