Question & AnswerQ&A (Republic Act No. 11765)
The short title of Republic Act No. 11765 is the "Financial Products and Services Consumer Protection Act."
The rights include the right to equitable and fair treatment; right to disclosure and transparency of financial products and services; right to protection of consumer assets against fraud and misuse; right to data privacy and protection; and right to timely handling and redress of complaints.
A financial consumer is defined as a 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 with current or prospective financial transactions with financial service providers.
The financial regulators are the Bangko Sentral ng Pilipinas (BSP), Securities and Exchange Commission (SEC), Insurance Commission (IC), and the Cooperative Development Authority (CDA).
The CDA regulates cooperatives offering financial products or services such as savings and credit, except insurance cooperatives (regulated by the IC), and cooperative banks and other BSP-supervised cooperative financial institutions (regulated by BSP).
Financial regulators have powers including rulemaking, market conduct surveillance and examination, market monitoring, enforcement actions, consumer redress or complaint handling mechanisms, adjudication authority, and other powers necessary or incidental to enforce this Act.
An investment adviser is any person who, for compensation, advises others on the value of investment products or the advisability of investing, purchasing, or selling them, or issues analyses or reports concerning investment products, but excludes certain professionals and entities like trust units, lawyers, insurance agents, and publishers as specified.
They must ensure board and senior management oversight on consumer protection, appropriate product design and delivery (including affordability and suitability assessments and cooling-off periods), transparency and disclosure, fair treatment of clients, privacy and data protection, consumer assistance mechanisms, and adherence 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.
Violators may be punished with imprisonment of one to five years, a fine ranging from Fifty thousand pesos (P50,000) up to Two million pesos (P2,000,000), or both. If a corporation or juridical entity commits the violation, responsible directors, officers, or employees shall also be held liable.
Administrative sanctions under the respective charters of financial regulators apply, including fines, suspension, cancellation of authority to operate, and for investment fraud, fines up to Ten million pesos (P10,000,000) plus daily fines, with possible disgorgement of profits or losses avoided.
Actions prescribe after five years from the consummation of the financial transaction or discovery of deceit or nondisclosure of material facts, but in any case prescribe after ten years from the commission of the violation. Insurance contracts have separate prescriptive periods under the Insurance Code.
No. Any contract provision waiving or depriving a client of their legal rights to sue, receive information, have complaints addressed, or protect their data is unlawful and unenforceable.
The financial service provider is solidarily liable for acts or omissions of its directors, officers, employees, agents, and accredited third-party service providers in marketing and transacting financial products or services.
Financial regulators must provide effective consumer redress mechanisms such as mediation, conciliation, or other alternative dispute resolution modes to handle financial consumer complaints before adjudication.