SEN. Sherwin Gatchalian has taken steps in safeguarding consumers against unethical and fraudulent schemes by some financial service providers and unscrupulous individuals.
Noting the wide array of financial products and services following the coronavirus disease 2019 (Covid-19) pandemic, Gatchalian underscored the need to come up with a framework that will uphold consumer protection.
'The mounting complaints coming from the consumers against online lending or loan sharks amid the pandemic is very alarming. They know that they are not covered by financial regulators, thus the need for a more effective mechanism to address this modern way of fraud,' Gatchalian said in filing Senate Bill (SB) 2287.
SB 2287, the 'Financial Products and Services Consumer Protection Act,' seeks to expand the jurisdiction of government financial regulators to cover all financial products and services offered or marketed by any financial service provider in the country, Gatchalian said.
Under the bill, the Bangko Sentral ng Pilipinas, Securities and Exchange Commission, Insurance Commission, and Cooperative Development Authority would be empowered to perform acts necessary for the protection of financial consumers, such as market conduct surveillance and examination, market monitoring, enforcement, provision of complaints handling mechanism, adjudication, and rule-making among others.
Financial service providers, on the other hand, will be prohibited from employing abusive collection or debt recovery practices against their financial consumers, said the vice chairman of the Senate Committee on Banks, Financial Institutions and Currencies.
The senator took note of the 15,015 new complaints received by the central bank's Consumer Empowerment Group from the first to the third quarter of 2020 that reflected a 63.3-percent increase from those recorded in 2019, which stood at only 9,250.
The figures, he said, did not take into account the unreported cases as some individuals and businesses were discouraged to do so because of insufficient action on the part of the bank, regulatory agency or law enforcement.