The Bangko Sentral ng Pilipinas (BSP) has processed P540-million worth of financial consumers’ complaints and concerns in 2021 via its Consumer Assistance Management System (CAMS), according to BSP Governor Benjamin E. Diokno.
Including the pre-COVID 2019 period and when the pandemic was declared in 2020, the BSP has received and processed about P2 billion-worth of consumer complaints in the last three years.
For both the pandemic years of 2020 and 2021 only, Diokno said CAMS processed 42,456 complaints that have been escalated to the BSP against its supervised financial institutions or BSFIs. These are customer complaints against banks, non-banks, e-money issuers, operators of payment system, among others.
“Declared amounts in the complaints received in 2021 alone add up to about 540 million pesos (P540 million); from 2019 to 2021, the cumulative total amounted to two billion pesos (P2 billion),” said Diokno in his opening statement at the
Senate Deliberation on the Proposed Financial Consumer Protection Act (FCP) on Monday, Jan. 17.
“A majority of these cases have been deemed closed. But the process was long and arduous. And for many complaints the resolutions were unfavorable to the consumer,” Diokno told senators.
The BSP has been strongly pushing for the passage of the FCP Act to empower the BSP and other financial regulators such as the Insurance Commission, the Securities and Exchange Commission and the Cooperative Development Authority to quickly resolve consumer complaints and “expedite the adjudication of reasonable monetary claims more efficiently, fairly and openly, all to the benefit of the consumers.”
“The passage of the FCP Act is not only a matter of necessity, it is an issue of urgency (because) as financial products and services continue to rise, so do risks. And we, policymakers, cannot stand idly by while the Juans and Marias continue to suffer from the limitations of our existing laws,” Diokno told senators. “Without doubt, if properly and swiftly implemented (the FCP Act) will reinforce the trust and confidence of the public in the financial system, and in the government’s ability to uphold consumer welfare,” he added.
The use of increased digitalization during the pandemic has also brought with it “graver risks” since complaints related to the use of internet banking and mobile banking accounted for 45.2 percent of the total complaints received by the BSP last year.
“Hackers and scammers took advantage of the digital infrastructure and consumer vulnerability to perpetrate crime. Based on BSP monitoring, the increased use by the public of digital financial services has given rise to a wave of cyber and financial crimes,” said Diokno.
During the first year of the pandemic, in 2020, Diokno said hacking and other malware attacks “surged by a whopping 2,324 percent from the previous year while phishing and other social engineering schemes increased 302 percent from 2019.”
In 2020, complaints about account takeover or identity theft went up by 2.5 percent, while Card Not Present fraud declined by 26.8 percent. However in 2020, phishing and other social engineering schemes notably increased. On the other hand, skimming and ATM-based cyber fraud declined in 2018 until 2021 since BSFIs have all migrated to EMV chip technology.
“Clearly, all of us as financial consumers, are exposed to various risks, frauds and cyber threats that could result in loss of income. Worse, it could result to loss of confidence in the financial system. Should there be a loss of confidence in the financial system, consumers might opt to keep their savings and investments away from the formal financial system – thus undermining the financial system’s ability to intermediate and facilitate the flow of funds to productive sectors of the economy,” said Diokno.
The BSP chief stressed that passage and enactment of the FCP Act will “provide an armor of protection to all financial consumers” since the proposed law covers many financial products and services offered by the banking, insurance, payments and fintech industries.
“It will ensure that relevant government institutions and financial regulators will be fully equipped with the legal authority to enforce prudent, responsible, and customer-centric standards of business conduct,” said Diokno. He also said that BSP and other regulators will have more power to sanction business practices and entities “that pose grave and irreparable injury to financial consumers (and) it will deter frauds and scams, and ensure that every Juan and Maria are provided with positive customer experiences.”
The FCP Act is basically provides “new, immediate, and efficient avenues for redress” as well as “alternate, less cumbersome, legal recourse for financial consumers.”
“Consumer complaints can be escalated and resolved at the level of the financial regulators, ensuring quick resolutions, hence de-clogging court dockets. Existing courts may then focus on more pressing matters,” said Diokno.
As part of CAMS, the BSP’s consumer chatbot or “BOB” for “BSP Online Buddy” when live last August 2020. The CAMS chatbot is an accessible, continuous, timely and efficient platform for escalating complaints against BSFIs. It handles queries in English, Tagalog or Taglish, sent through the webchat in the BSP Website, SMS, or social media such as Facebook messenger. BOB also has the capacity to automatically generate statistical reports relative to these data.