Financial consumer protection law pushed as complaints hit 12,000

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) is pushing for the enactment of a law that aims to enhance consumer protection as the number of complaints continues to grow amid the complexity of financial products and services as well as the increased adoption of digitalization in the country.

BSP Governor Benjamin Diokno said the central bank together with the Securities and Exchange Commission, Insurance Commission and Cooperative Development Authority are closely coordinating with the Senate  for the immediate passage of the proposed Financial Consumer Protection Act (FCPA).

“The Financial Consumer Protection Act is a timely reform amid the growing complexity of financial products and services in the country and is aligned with BSP’s commitment to promote digitalization and protect financial consumer welfare,” Diokno said.

As it promotes the digitalization of financial services, Diokno said the BSP is supporting the passage of the law that will provide consumers legal protection “as they explore the opportunities and face risks associated with the evolving financial landscape.”

In June last year, the House of Representatives approved on third and final reading House Bill 6768 or An Act Affording More Protection to Consumers of Financial Products and Services.

Meanwhile, Senate Bills 60, 534, 1329, 1335, 1739 and 2287 have also been filed and referred to the Senate committee on banks, financial institutions and currencies. A sub-committee headed by Sen. Sherwin Gatchalian has been designated to deliberate on these bills.

“The legislative measure empowers financial regulators to take necessary actions against financial entities performing acts that may undermine consumer welfare and provides a redress mechanism. This is seen to further strengthen the trust and confidence of the public in the financial system,” he said.

The FCPA covers all financial products and services; institutionalizes consumer protection standards; and promotes transparent and responsible pricing, fair and respectful treatment of clients privacy, and client data protection.

It gives financial regulators the authority to issue rules and regulations that will ensure consumer protection; conduct hearings on consumer complaints; and enforce action such as restriction on the imposition of excessive or unreasonable interests, fees or charges.

Diokno pointed out the BSP processed about 12,000 complaints coursed through its regular complaint channels or the automated chatbot BSP Online Buddy (BOB) in the first half of the year.

Complaints and queries processed through BOB represented 58 percent of total cases during the second quarter of 2021. This is almost four times higher than the 15 percent BOB usage rate during the third quarter of 2020.

“The increased usage suggests the effectiveness of BOB in providing consumers with an accessible and efficient platform for escalating complaints regarding the products and services provided by BSP-Supervised Financial Institutions,” Diokno said.

Customer satisfaction data from the 2020 BOB feedback portal indicated that 69 percent of respondents were satisfied with the service of the chatbot.

According to a survey by Silicon Valley-based data analytics firm Fair Isaac Corp. almost six out of 10 Filipino consumers prefer to use digital and mobile channels in transacting with their banks.

Diokno pointed out only three percent or 358 concerns filed from January to June this year pertained to debt collection or debt restructuring of loans and credit card accounts.

Of the total debt restructuring and affordable payment arrangement filed with the BSP chatbot, Diokno said around 31 percent were resolved in favor of the consumer and another 32 percent are still for evaluation and coordination with the client.

He added that 21 percent are still awaiting action or reply from the concern BSP-supervised financial institutions.

“Complaints that were not resolved in favor of the client comprise only of 13 percent of the total number. So based on the given number, it is apparent that generally consumers and financial institutions do their direct coordination and find common ground in negotiating their obligations,” he said.