BSP urges greater credit card vigilance as fraud cases rise during pandemic

The central bank has tightened regulations governing credit card operations in response to the spike in fraud complaints from the public as the volume of digital transactions continue to grow during the ongoing coronavirus pandemic.

In an online press briefing on Thursday, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said regulators were working closely with supervised financial institutions and consumers toward stamping out credit card-related fraud.

He noted that, since the agency activated an online chatbot on its website last year where bank clients can raise issues about the financial services they receive, a total of 23,000 complaints had been lodged, of which a quarter were related to various credit card complaints.

“The BSP underscores collective vigilance against frauds amid the increased accessibility of innovative digital financial products and services during the pandemic,” he said. “This is seen to foster greater confidence in the financial system under the new economy.”

Diokno said the central bank recognized that credit card was an expedient means of payment and, in line with this, had issued regulations mandating banks to put in place stringent information technology security controls and sound risk management practices, and to adopt industry-standard technology like the multifactor authentication system for online transactions.

The BSP has also tightened the reporting requirements for financial institutions on cyber-related incidents and operational disruptions to ensure the protection of consumers should an actual attack take place.

“The BSP stands ready to deploy its full range of supervisory tools to foster market discipline and to protect the rights and interests of consumers in an expanding the digital landscape,” Diokno said.

Recognizing the “critical” role of consumers in reducing their vulnerability to cyber-risks—and to help them in this regard—the BSP said it would sustain its information campaign against credit card fraud.

In particular, the central bank’s digital literacy program disseminates advice on how to protect online banking accounts, including the creation of strong passwords, watching out for phishing emails and spoofed websites, and keeping one’s account and personal information confidential.

The BSP noted that fraudulent credit card transactions commonly involve information and identity theft, phishing and its variations, and card skimming and card replacement schemes. Vigilance among financial consumers is crucial as unwittingly revealing personal and account information may lead to unauthorized credit card use.