Consumer protection in electronic banking (e-banking), e-commerce

The Bangko Sentral ng Pilipinas (BSP) recently issued Circular No. 542, providing for consumer protection for electronic banking. The salient features of Circular No. 542 are:

1. With the growth of e-banking and e-commerce, banks should use reliable methods of originating new customer accounts, ensuring strict adherence to the usual “KYC” or “know your clients” requirements.

2. The Circular spells out the minimum security measures that a bank should employ in its automated teller machine (ATM) facilities and internet or mobile banking activities to protect depositors and consumers from fraud, robbery and other e-banking crimes.

3. Banks should use appropriate technology to authenticate the identity of e-banking customers, and establish sound monitoring system, including audit features that can assist in the detection of fraud, money laundering, compromised passwords, or other unauthorized activities.

4. Banks should establish and maintain comprehensive information security program and ensure that they are properly implemented and enforced. Banks should ensure that their information security measures and internal control related to electronic banking are installed, regularly updated, monitored and are appropriate with the risks associated with the products and services.

5. Banks are required to provide their customers with a level of comfort regarding information disclosures, protection of customer data and business availability that they can expect when using traditional banking services.

6. Banks may receive customer complaints either through an electronic medium or otherwise, concerning an unauthorized transaction, loss, theft in its electronic banking account. Banks should also establish procedures to resolve disputes arising from the use of the electronic banking products and services.

7. The Board of Directors are expected to take an explicit, informed and documented strategic decision as to whether and how the back is to provide e-banking services to their customers. On the other hand, bank Compliance Officers should ensure that proper controls are incorporated into the system.

Circular No. 542 was published in the Philippine Daily Inquirer (11 September 2006). It takes effect 15 days after publication.

One thought on “Consumer protection in electronic banking (e-banking), e-commerce

  1. lawenthusiast

    in regards to RA 9194 or AMLA, are election candidates spared from the protection of any form of harrassment which is covered in this law? does this mean that there should no be proceedings that can be filed against them during election period?


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