BSP Enforces AFASA Rules to Combat Financial Scams

The Bangko Sentral ng Pilipinas has released the implementing rules of Republic Act No. 12010, or the Anti-Financial Account Scamming Act, which targets fraud and cybercrime across the financial system.

Signed into law by President Ferdinand R. Marcos Jr. in July 2024, AFASA takes effect with the publication of these implementing regulations.

“The issuance of AFASA’s implementing rules marks a milestone in our fight against cybercrime,” BSP Governor Eli M. Remolona Jr. said. “Beyond serving as a powerful tool against evolving financial scams, these rules also enhance consumer protection and boost confidence in the domestic financial system.”

The BSP issued three circulars detailing the enforcement framework.

The first regulation, on Information Technology Risk Management, directs BSP-supervised institutions (BSIs) to fortify fraud detection and prevention systems.

This includes upgrading security protocols, improving transaction verification processes, and rolling out consumer protection tools to reduce unauthorized transactions.

The second circular covers Financial Account Inquiry and Information Sharing, granting the BSP authority to investigate financial accounts tied to scam-related activities.

Such inquiries require a “well-founded belief” that a violation under AFASA has occurred, striking a balance between bank secrecy, privacy, and law enforcement imperatives.

Information obtained through these inquiries may be shared with competent authorities, provided there are formal cooperation agreements.

The third regulation pertains to the Temporary Holding of Disputed Funds and Coordinated Verification Process.

Under this, BSIs and clearing switch operators must develop real-time or near-real-time automated systems to track and flag suspicious transactions within one year of the rule’s effectivity.

Institutions are authorized to temporarily hold disputed funds for up to 30 days and collaborate to verify transaction legitimacy, allowing the return of funds to victims when warranted.

AFASA aims to counteract scams such as phishing, vishing, and other social engineering schemes by criminalizing the misuse of financial accounts, especially through newer technologies.

It also addresses offenses previously outside the scope of existing Philippine cybercrime laws.

The BSP urged the public to remain alert, secure personal financial information, and immediately report suspicious activity to their banks or relevant authorities.