QuestionsQuestions (IRR of Republic Act No. 11765)
The policy is to ensure mechanisms for transparency, fair and sound market conduct, and fair, reasonable, and effective handling of financial consumer disputes to foster confidence and stability of the Philippine financial system. It protects: (a) right to fair and equitable treatment; (b) right to disclosure and transparency; (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.
It applies to all financial products or services offered or marketed by cooperatives authorized in their Articles and By-Laws, except insurance cooperatives and cooperative banks.
A CDARE refers to cooperatives registered, regulated, and/or supervised by the Cooperative Development Authority (CDA) that offer or market financial products and/or services, excluding insurance cooperatives and cooperative banks.
Cooling off is the policy allowing a financial consumer to consider costs and risks, free from pressure, and cancel the agreement without penalty upon written/electronic/valid notice during the given period.
A CDARE must: (1) use terms and conditions that are not unfair—no significant imbalance to the detriment of the consumer; ambiguities construed in favor of the consumer; and no clauses that exempt/absolve the CDARE from skill, care, diligence, professionalism, or liability for failure; and (2) not use abusive collection or debt recovery practices—must use reasonable, legally permissible means and act in good faith and with reasonable conduct.
CDAREs must establish a Code of Conduct applicable to all staff and authorized agents, containing: (a) organizational values and standards upholding consumer protection; and (b) procedures for detecting violations and responding/enforcing sanctions. It must also be integrated into recruitment and training policies.
They must not use deceptive or high-pressure/aggressive sales techniques and must not force clients to sign contracts or rush into deals without shopping around.
CDAREs must have written procedures to assess whether the product/service is suitable and affordable to consumers—i.e., whether amounts and terms have a low probability of serious hardship and provide reasonable prospect of value. For credit, assessments must include measures to prevent over-indebtedness.
The consumer must have the option to choose the provider of the required product/service, subject to reasonable standards. The provider must inform the consumer of this right prior to the availing of the main product.
Cooling off must be adopted clearly and may cover specified products/services. It must be no less than three (3) business days and no more than ten (10) business days. The duration should be longer for more complex/long-term products. The period must be expressly stipulated in policy/contract/agreement, allowing cancellation/return without penalty (though processing costs may be recoverable if clearly stipulated).
A consumer may pre-pay at any time before the agreed maturity date in whole or in part. Any costs/fees charged must be reasonable and must be disclosed to ensure transparency and accountability.
Interest rates and other charges on loans are within a range reasonably determined by the Authority after consulting CDAREs through the NAC; CDAREs retain discretion within that range.
CDAREs must establish their respective CPRMS in accordance with Authority guidelines, serving as the foundation to ensure adherence to RA 11765 and other applicable consumer protection laws and CDA rules.
CDAREs must disclose significant terms and conditions, including: risks/return and possible warnings; waivers/limitations of liabilities; consumer rights and responsibilities; consequences of failure to meet obligations; rights/responsibilities of CDAREs; role of authorized agents; conflicts of interest; cancellation; full price/cost breakdown (interest, fees, charges, penalties) and whether changeable; and procedures/rationale for how prices are set as proof of responsible pricing.
CDAREs must notify consumers at least thirty (30) days prior to implementation of changes. Notifications must explain the nature and extent of change and potential impact, and must attach the Board Resolution approving the changes.
For complaints/requests: (1) acknowledgment—within 24 hours for both simple and complex; (2) processing/resolution—simple within 7 days, complex within 45 days; (3) communication of resolution—simple within 9 days, complex within 47 days.
The consumer may elevate the concern to the Authority within seven (7) days from receipt of the communication of the result of the assessment/investigation/resolution by the cooperative.
Actions/claims accrue under RA 11765 prescribe after five (5) years from consummation of the transaction or from discovery of deceit/non-disclosure of material facts; in any event, they prescribe after ten (10) years from the commission of the violation.
Certain pleadings/motions are prohibited (e.g., motion to dismiss on any ground, summary judgment motions, counterclaim, cross-claim, etc.). Also, in CDA proceedings, technical rules of procedure and evidence obtaining in court of law shall not be applicable.