House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) is warning illegal online lending and investment scams that a tougher crackdown on their operations “is in the offing” as the Albay solon says that the President is likely to sign the Financial Consumer Protection Act this week.
“I am told by sources in the Palace that the President is very likely to sign it this week. In any case, it lapses into law on May 7,” Salceda, who is the principal author of the law, said.
The Financial Consumer Protection (FCP) Act will vest financial regulators with the powers of rule-making, surveillance and inspection, market monitoring, enforcement, and adjudication powers over financial products.
The law also expands the subpoena powers of the Bangko Sentral ng Pilipinas and the Securities and Exchange Commission over financial products and services.
It also increases the fine for investment fraud to up to 10,000,000 on top of criminal sanctions. The regulators may soon also be able to file independent civil action on behalf of victims of financial or investment fraud.
“Once enacted, the FCP Act means more powers to authorities, jail time and steeper fines for fraudsters, as well as clearer laws and regulations on investments, lending, and other financial products.”
“Over the past few days, the SEC has been conducting a crackdown on dubious online investments and online lenders. I commend that work, and I expect an even bigger crackdown once the law is enacted.”
“I particularly want tougher moves against the harassment conducted by collectors of illegal online lending applications. I also want jail time for those who solicit unauthorized investments,” Salceda added.
Salceda says that the FCP Act “is a crucial balancing measure in our efforts towards financial inclusion. As more people become included in the financial system, you have a greater base of potential victims of financial fraud. So, you want tougher laws and penalties against fraudsters.”
“Right now, our system is a little ad hoc. If I along with colleagues did not raise hell about the Nagoyo scam for example, we might not have seen the full refund of victimized accounts. With the FCP Act, financial consumers have more solid footing,” Salceda added.
“I also pushed for the ‘no waiver of rights’ clause in the FCP Act. There were reports that banks who refunded accounts victimized in the Nagoyo scam were requiring clients to sign waivers that they will not file cases against the banks in return for the refund. No more of that kind of waiver once the FCP Act is law. You don’t just get to say ‘sorry, let’s move on’ if you mess up as a bank.”
“The next step is to write a good IRR and issuances based on the rule-making powers to be granted. In particular, I will be lobbying for an end to unjust and unfair debt collection practices to be one of the rules issued by the SEC on the matter, while we in Congress still debate proposals on the matter as well,” Salceda explained.
“In the meantime, the FCP Act will strengthen confidence in the country’s banking sector. We badly need a confidence boost in the system following our grey-listing in the Financial Action Task Force,” Salceda added.