Question & AnswerQ&A (Republic Act No. 11765)
Republic Act No. 11765 is known as the 'Financial Products and Services Consumer Protection Act.'
The rights protected include: (a) Right to equitable and fair treatment; (b) Right to disclosure and transparency of financial products and services; (c) Right to protection of consumer assets against fraud and misuse; (d) Right to data privacy and protection; and (e) Right to timely handling and redress of complaints.
Financial consumers include any person or entity, or their duly appointed representative, who is a purchaser, lessee, recipient, or prospective purchaser, lessee, or recipient of financial products or services, including those having current or prospective financial transactions with financial service providers.
Investment fraud refers to any form of deceptive solicitation of investments from the public, including Ponzi schemes, boiling room operations, and offering or selling investment schemes without a license or permit from the SEC, except for exempt transactions under existing laws.
The Bangko Sentral ng Pilipinas (BSP), Securities and Exchange Commission (SEC), Insurance Commission (IC), and Cooperative Development Authority (CDA) (the CDA only with respect to cooperatives offering financial products or services except those under other regulators) are the financial regulators.
Financial regulators have powers including rulemaking, market conduct surveillance and examination, market monitoring, enforcement actions, providing consumer redress mechanisms, adjudication of disputes, and other powers necessary or incidental to implementing the Act.
Financial service providers must ensure board and management oversight for compliance, appropriate product design and delivery, transparent disclosure and responsible pricing, fair treatment of clients, protection of client data privacy, provide consumer assistance mechanisms, and adhere to information security standards.
The Act applies to all financial products or services offered or marketed by any financial service provider under the jurisdiction of the financial regulators.
Financial regulators must provide efficient and effective consumer redress mechanisms, like mediation or conciliation, prior to adjudication. Financial service providers must also establish consumer assistance units to handle complaints, inquiries, and requests.
Violations may be punished by imprisonment of one to five years, fines ranging from Fifty thousand pesos to Two million pesos, or both. If committed by a corporation, responsible officers may be held liable.
No, any contract provision waiving or depriving a client of rights such as suing the financial service provider, receiving information, or protecting data privacy is not lawful or enforceable.
All actions or claims prescribe after five years from the consummation of the financial consumer transaction or discovery of deceit, but in any event, prescribe after ten years from the commission of the violation. Insurance contracts follow prescriptive periods under the Insurance Code.
Financial service providers are solidarily liable for acts or omissions of their directors, officers, employees, agents, or accredited third-party service providers in marketing and transacting financial products or services.
Yes, when prescribed or determined necessary, providers must adopt a cooling-off policy allowing clients to reconsider and cancel the contract without penalty during that period, except for some types like insurance or HMO products after a claim.
Responsible pricing involves pricing, terms, and conditions that are affordable to clients and sustainable for providers, considering client needs and competitive pricing schemes.