The Bangko Sentral ng Pilipinas is embarking on a campaign to fully protect consumers from those engaging in financial scams.
The BSP said it would conduct more financial education seminars to help consumers distinguish between prudent investment opportunities and those that are fraudulent.
Johnny Noe Ravalo, managing director at the central bank and head of its financial and consumers affairs group (FCAG), said the BSP would make consumer protection a more vital part of its function.
Striving for a highly developed financial system entails having sufficient means to protect consumers, Ravalo said.
“Financial consumer protection should now be an integral part of the legal, regulatory and supervisory framework,” he explained.
Apart from holding more financial literacy seminars, compelling banks to be more transparent in offering financial products to their customers is another measure the BSP will take to enhance consumer protection.
The BSP recently issued a circular requiring banks to provide their credit cardholders a breakdown of the interest charges and fees imposed on them.
Regulators said the circular should address complaints arising from lack of awareness of consumers about the expenses involved in the use of credit cards for making purchases.
Apart from credit card problems, other complaints filed with FCAG include difficulty in withdrawing funds, interest rates on loans, and details of investment products.
The BSP said that one of the basic things consumers must do to avoid financial scams is to exercise caution when being offered too-good-to-be true interest rates by peddlers of financial products, be it deposit or fixed-income investment instruments.
The BSP said that more often than not, fraudulent financial activities entailed the offer of high interest rates to attract depositors or investors.
The regulator said many banks had been ordered closed due to unsafe and unsound practices. Also, some bank officials commit fraud by offering investment products that have above-market interest rates.
In deciding to enhance consumer protection, FCAG has simply responded to calls from the Organization of Economic Cooperation and Development (OECD) for regulators to designate a body that will strictly protect consumers’ interests, Ravalo said.
“OECD calls for the designation of oversight bodies responsible for financial consumer protection with the necessary authority to fulfill mandates. The international body also encourages the promotion of broad-based financial education especially for vulnerable groups,” he pointed out.
According to Ravalo, the OECD will hold an international conference on consumer protection in September, and the Philippines, through the BSP, shall be the host.
The event will be held in Cebu.
Representatives from various central banks and other financial regulatory bodies will convene to discuss ways to improve consumer protection, Ravalo said.