MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) is proposing rules that banks and nonbanks must follow when temporarily holding funds that are suspected to be from fraudulent transactions in a bid to safeguard consumers from financial cybercrimes.
The BSP is gathering feedback from stakeholders on a draft circular that would create an industry protocol for temporary holding of suspicious funds. Financial institutions have until February 10 to send their comments.
Article continues after this advertisementThe BSP said the proposed changes were meant to enforce certain provisions of Republic Act No. 12010 or the Anti-Financial Account Scamming Act (Afasa), which was signed into law last year in a bid to combat financial cybercrimes.
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Afasa prohibits and punishes crimes like acting as money mules to carry out scams, as well as performing social engineering schemes and economic sabotage. The law gives the BSP a limited authority to investigate bank deposits, e-wallets and other financial accounts involved in such crimes.
Article continues after this advertisementAfasa also imposes responsibilities on regulated entities to employ adequate risk and fraud management systems to ensure that their clients’ financial accounts are protected.
Officials have in recent weeks unveiled a string of measures to reignite the world’s number-two economy, with an eye to achieving five percent annual growth.
lotsa slots casino gamesArticle continues after this advertisementThe draft circular made it clear that the proposed rules would not apply to funds in erroneous transactions which, according to existing guidelines, must be returned to the sender within prescribed timelines.
Article continues after this advertisementThat said, the document provided that the regulations would cover funds that are the subject of disputes for being unusual and for having no clear economic purpose.
The funds may also be held temporarily if they are suspected to have come from unknown or illegal sources, and are facilitated through unauthorized access of a financial account owner’s sensitive information.
Article continues after this advertisementIf approved, the circular would give banks and nonbanks authority to temporarily hold suspicious funds for a period of not more than 20 calendar days. That period may be extended only by a “court of competent jurisdiction.”
If a fund is held, the BSP said the equivalent amount shall be considered credited but may not be withdrawn during the holding period.
At the same time, regulated entities must initiate a coordinated verification process to validate a disputed transaction. This means banks and nonbanks must establish and implement their own policies, systems and procedures for verification. Such steps must follow agreed industry protocol and the requirements in the draft BSP circular.
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The recipient of the funds that had been held off may, at any time, challenge the action by justifying the legitimacy of the disputed transaction to their banks and e-wallets.
“The State shall undertake measures to protect all persons from cybercrime schemes by regulating the use of financial accounts and preventing their use in fraudulent activitiesjili777,” the document read.
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