Legarda pushes for reforms on financial consumer protection

Former Senator, now Deputy Speaker, Loren Legarda stressed the importance of having appropriate mechanisms in place for the protection of consumers in financial markets and is fervently pushing for the passage into law of House Bill 6768, also known as the Financial Products and Services Consumer Protection Act.

“With the rapid development of complex and sophisticated financial products and services coupled with technological advancements and product innovations, cases of consumer fraud, abuse and misconduct have also increased. We have to build consumer confidence and trust in the financial system to promote stability, growth, efficiency and innovation. Thus, the passage into law of the proposed Financial Products and Services Consumer Protection Act is vital in safeguarding consumer rights, particularly in relation to financial markets,” Legarda said.

House Bill 6768, which was co-authored by the three-term Senator, was passed on third reading in the House of Representatives last year. The bill seeks to provide government financial regulators – Bangko Sentral ng Pilipinas (BSP), Securities and Exchange Commission (SEC), Insurance Commission (IC), and Cooperative Development Authority (CDA) – additional powers for rulemaking, market conduct surveillance and examination, market monitoring, enforcement, consumer redress or complaints handling mechanism, and adjudication to further enhance financial consumer protection. According to Legarda, HB 6768 which is now pending in the Senate, will help uphold fair financial market practices and protect consumers against exploitative transactions.

Moreover, the bill mandates financial service providers to ensure the appropriate design and delivery of their products and services to the needs, understanding and capacity of both their markets and targeted clients. Financial service providers are also required to ensure transparency, disclosure and responsible pricing to give clients the leeway to review the products being offered before coming up with a decision.

The bill also promotes fair and respectful treatment of clients without discrimination on the basis of age, financial capacity, ethnicity, gender, religious and political affiliation, among others. Consistent with the Data Privacy act, the bill also promotes the privacy and protection of the client’s personal data. Whereas, a financial consumer protection assistance mechanism will be established to cater free assistance for financial transaction concerns and complaints.

“I am hoping that this bill will soon be passed into law for us to immediately institutionalize consumer protection in the financial market. It is high time for us to update our consumer rights protection laws for these to be aligned with global best practices, ensure good governance for the benefit of our people, and help reinforce stronger confidence in the financial market as we usher our economy towards an equitable and sustainable growth and recovery,” Legarda concluded.***