Resolution of financial complaints

Getting a redress for financial products or services that have gone wrong is expected to become expeditious under the recently enacted Financial Products and Services Consumer Protection Act.

The law gives relief to complaints against financial products or service providers that developed or marketed savings, deposits, credit, insurance, preneed and health maintenance organization products.

Also in the list are securities, investments, payments, remittances and other similar products and services, including digital financial products and services that are accessed or delivered through digital channels.

If the financial regulators tasked with implementing the law—the Bangko Sentral ng Pilipinas (BSP), the Securities and Exchange Commission (SEC), the Insurance Commission and the Cooperative Development Authority—receive those complaints, they have to address them, first, through mediation, conciliation or other alternative dispute resolution processes.

In case any of those efforts fail, the regulators have the power to adjudicate the complaints based on the authority granted to them by their respective charters.

The law, however, makes an exception for financial transactions that are (a) purely civil in nature (meaning, no criminal liability is involved) and (b) the claim or relief demanded is solely for the payment or reimbursement of a sum of money that does not exceed P10 million.

In this kind of complaint, the BSP and the SEC have the authority to resolve or adjudicate them.

Their decision shall be final and executory, and may not be restrained or set aside by any court other than the Court of Appeals (CA) through a petition for certiorari on the ground of abuse of discretion, or lack of or excess of jurisdiction.

If the decision was rendered by a duly authorized officer or body of the BSP or the SEC, or their heads themselves, it cannot be appealed to the Monetary Board or the SEC en banc, as the case may be.

By specifying the kind of action that can be filed in the CA in regard to the decision, the law bars the losing party from resorting to other legal maneuvers to overturn or delay its enforcement other than for the two grounds mentioned.

What’s more, the petition has to be filed within 10 days from receipt by the aggrieved party of the decision, otherwise the losing party would be a goner.

And because that petition is not considered a matter of right to any litigant, the CA can dismiss it outright even without giving the BSP or the SEC or the aggrieved party the opportunity to comment if it believes there is no legal basis for its reversal or modification.

The conditions imposed to justify the intervention of the CA shows the intent of the law to expedite the resolution of complaints of that nature.

It is common knowledge that delaying tactics are often resorted to by losing parties, especially if they have a stable of well-paid lawyers, to force the winning party to agree to a lower amount.

To assist the BSP and the SEC in the performance of their adjudicatory authority, the law gives them the power to “ … order the examination, search and seizure of all documents, and books of accounts of any entity or person under investigation as may be necessary for the proper disposition of the cases before them.”

This means, they do not have to go to any court to apply for a search warrant which, under existing court regulations, require the personal examination by the judge of the basis of the application and its supporting documents.

Since the law does not deprive the regular courts of their jurisdiction over monetary cases that do not exceed P10 million, it is up to the complaining consumer to decide where to seek relief for his or her grievance.

The courts or the BSP or the SEC?

That question is a no-brainer. Since the resolution of issues on financial transactions requires a special kind of expertise, it is better left to the government agencies whose primary task is to regulate or supervise those activities.

Besides, the court dockets are hopelessly clogged.

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