By Shiela Bertillo
The Bangko Sentral ng Pilipinas (BSP) issued a memorandum last Wednesday, December 22, directing to all BSP-Supervised Financial Institutions (BSFIs) where Deputy Governor Chuchi Fonacier cited the central bank’s Financial Consumer Protection Framework, which tells banks to uphold the “fair treatment” principle.
The issuance followed the recent “Nagoyo” scac BDO Unibank Inc. hacking incident, where the stolen amount ranged from P25,000 thousand to P50,000 pesos per account. The money stolen from BDO accounts were transferred to the scammer named “Mark D. Nagoyo” who has multiple UnionBank accounts.
Preceding the incident, a netizen caught that a new line was added in the bank’s electronic banking terms and conditions which states that BDO “shall not be liable for any loss or damage” regarding the use of their online banking services from hacking or any other security breaches “with or without your participation.”
However, BDO denied that they just updated these terms, saying that “there is no added clause due to the recent incident.” (Read more:BDO Denies Changing Online Banking Terms Due to ‘Nagoyo’ Scam)
“BSFIs are expected to adopt effective risk management systems and adhere to prudential standards and requirements to contribute to the sustained safety and soundness of the financial system. These include protecting the interest and upholding the trust and confidence of consumers and the general public in the financial system,” Fonacier stressed in the memo.
Further, the memo pointed out that banks are required to exercise a “high degree of diligence” as jurisprudence charges banks with the “obligation to treat their client’s account with the highest degree of care.”
“The BSP reminds all BSFIs to comply with the provisions of BSP Circular No. 1048 dated 06 September 2019 on the Financial Consumer Protection Framework. In this respect, the BSP reiterates the need to uphold the “Fair Treatment” principle whereby BSFIs are required to observe fair and equitable terms and conditions, among other things, specifically, that “Terms and conditions are not unfair in that there is significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer,”” the BSP added.
The memorandum also emphasized that non-compliance with the provisions of the aforementioned Circular shall be subject to supervisory enforcement actions.
However, BDO claimed that the liability clause was “standard” in the banking industry.
Nonetheless, the BSP and the BDO had earlier guaranteed that the bank would be reimbursing the victims and recognized that a “sophisticated fraud technique” affected some of its depositors.
This article is published on BitPinas: BSP Reminds Banks to Treat Customers Fairly