BSP Adopts Guidelines to Implement the Financial Products and Services Consumer Protection Act

The Monetary Board, in its Resolution No. 1683, approved the adoption of the Amended Regulations and Guidelines on Financial Consumer Protection (“FCP”) Framework to implement Republic Act No. 11765 or the Financial Products and Services Consumer Protection Act (“FCPA”), and accordingly approved the amendments of the relevant provisions of the Manual of Regulations for Banks (“MORB”) and Manual of Regulations for Non-Bank Financial Institutions (“MORNBFI”).

Some of the relevant provisions are as follows:

Scope and Applicability. 

The Framework shall apply to all financial products or services created, developed, offered, or marketed by a Bangko Sentral-Supervised lnstitutions (“BSls”). The BSls’ adoption of the Framework shall be proportionate to their asset size, structure, nature of products and services, and complexity of operations.

Consumer Protection Risk Management System (“CPRMS”). 

A BSI should have a CPRMS that is integrated into the BSI’s enterprise-wide risk management processes and risk governance framework. The CPRMS includes the governance structure, policies, processes, measurement and control procedures to ensure that Financial Consumer protection-related risks are identified, measured, monitored, and mitigated. A carefully devised, implemented, and monitored CPRMS provides the foundation for ensuring the BSI’s adherence to Consumer Protection Standards of Conduct (Standards) in reference to Sec. 1003/ 1003-Q of this Circular and compliance with the FCPA and relevant laws, rules and regulations, thereby, ensuring that identified risks to the BSI and associated risks of financial harm or loss to Financial Consumers are properly managed. 

The CPRMS and Financial Consumer Protection Assistance Mechanism (“FCPAM”), in reference to Sec. 1003/1003-Q of this Circular should ensure systematic application of policies and procedures, including the Standards.

Consumer Protection Standards of Conduct. 

The Standards are the core principles which BSls must adhere to at all times in dealing with Financial Consumers, which should be embedded in the BSls’ conduct and culture. These are specific parameters used to gauge the efficiency of a BSI’s CPRMS and FCPAM, modelled after international best practices. The Standards are:

1. Disclosure and Transparency; 
2. Protection of Client Information;
3. Fair Treatment;
4. Effective Recourse; and
5. Protection of Consumer Assets against Fraud and Misuse

Financial Consumer Protection Assistance Mechanism.

Each BSI must establish a single FCPAM, commensurate to the size, structure, nature of products and services, and complexity of operations, to provide free assistance to Financial Consumers on their concerns about the BSI’s financial products, services and/or transactions. This shall include handling of complaints, inquiries, and requests.

Financial Consumers who are dissatisfied with the BSI’s handling of their complaints, inquiries or requests, may escalate their concerns with the Bangko Sentral Consumer Assistance Mechanism (“CAM”). Reporting the concern with the BSI’s FCPAM is a condition precedent to the filing of a complaint to initiate the Bangko Sentral CAM.

Claims assessment and investigation. 

A BSI should evaluate any claim made by any account holder in relation to any disputed transaction for purposes of resolving the claim or assessing the parties’ liability in accordance with the FCP Framework, and other existing laws, rules, and regulations. BSls should resolve a claim in a fair and reasonable manner. The claim resolution process should also be communicated to the account holder in a timely and transparent manner. Fraud-related concerns should be given utmost priority and should be resolved within a reasonable time commensurate to the complexity of the circumstances. 

Reporting Channels. 

BSls should provide its Clients with a free and active reporting channel/s which may consist of a manned phone line, -mobile number online portal, email, chatbot, instant messaging, or other closely monitored communication channels which should be available on a 24/7 basis. Any Financial Consumer who contacts the reporting channel should receive an immediate written acknowledgement through the same channel.

Transitory Provisions.

BSls shall be given six (6) months from the effectivity of this Circular to: (1) perform a gap analysis of their current CPRMS, FCPAM and related financial consumer protection practices vis-d-vis the provisions of this Circular; and (2) propose an action plan duly approved by its Board of Directors to achieve full compliance within a reasonable period of time but not longer than one (1) year from the effectivity of this Circular. 

A BSI should be able to show its plan of action with specific timelines, as well as the status of initiatives being undertaken, to fully comply with the provisions of this Circular, upon request of the Bangko Sentral.