President Ferdinand “Bongbong” Marcos, Jr. has included financial crimes as among his top 12 priority legislations, giving more teeth in curbing illegal practices like economic sabotage, social engineering schemes, and transacting with funds obtained from illegal means. Making the announcement during his recent State of the Nation Address (SONA), the Chief Executive said that the bills, including the Anti-Financial Account Scamming Act, will protect and strengthen “our financial system, the nerve center of our economy, [which] remains strong and stable.”
The Anti-Financial Account Scamming Act, also known as House Bill 7393, is part of the President’s measure to shield the public from illegal scammers and lending fraudsters. A month before the SONA, he had urged the people to be more discerning and vigilant of digital creditors and fraudsters who offer deals that are “too good to be true.”
From consumer protection to financial inclusion
This presidential drive to hammer down on scammers also comes in the heels of the Bangko Sentral ng Pilipinas’ (BSP) issuance of regulations to implement the Financial Consumer Protection Act last February. Penalties for individuals violating this law can range from a fine of P50,000 to 2 million pesos, and/or a jail term from one to five years.
Global fintech firm Tala expressed its support for both the President and the BSP’s strong resolve to put a halt to illegal lenders’ unethical practices by prioritizing regulatory enforcement. At the same time, it recognizes that spreading financial literacy can also protect consumers from scammers while bringing them much-needed peace of mind and financial empowerment.
Thus, Tala has aligned with the BSP national strategy for financial inclusion that involves pushing for free, effective, accessible, financial education (fin-ed) programs for a more financially inclusive Philippines.
The BSP’s upcoming Financial Literacy Course (FLC) in 2024 will teach strategies on handling personal finances and making sound financial decisions. To be rolled out through the Technical Education and Skills Development Authority (TESDA), this fin-ed program will benefit four million technical-vocational education and training learners. FLC topics include financial planning, saving and budgeting, debt and investment management, digital financial literacy, and consumer protection.
The BSP is also working with partners from the private and public sectors to develop customized financial literacy training programs for other stakeholders including learners, educators, government employees like members of the Armed Forces, and Overseas Filipino Workers.
“The BSP’s theme of financial inclusion is very relevant given the surge of consumer participation in digital-driven finance industries. Along with the SEC’s crackdown on illegal lenders and the administration’s initiatives against technology-based scams, the government should be lauded for such efforts to protect Filipino consumers. It is critical that the Philippines has a strong and collaborative regulatory environment that allows global Fintechs like Tala to operate in a safe, fair, transparent and still diverse marketplace.” said Tala Senior Director for Global Customer Experience Operations Iona Iñigo-Mayo.
Financial literacy as the best protection
Household consumer lending in the Philippines grew significantly in 2022 and increased 25.7% by February 2023. However, consumer complaints also surged as well by 15% in 2022, said the BSP.
Consumer complaints rose because the scammer’s innovative if unethical tactics created a need for borrowers to receive information to protect themselves. As explained by Iñigo-Mayo, “The underserved customer who is accessing credit for the first time needs education on how to manage their finances, how to plan, how to save, how to borrow responsibly and most importantly how to protect themselves against fraud.”
In agreement with the President and regulators that an informed consumer is the best protection against fraud, Tala also promotes financial literacy through its own nationwide programs and regular advisories in its social media channels.
“Tala is committed to protecting its consumers by giving them access to the information they need to make informed decisions about their credit and treating them fairly. We understand that borrowers are often in a difficult financial situation, and we want to make sure that they are treated fairly and with respect. We are extremely transparent about our credit terms and offer flexible repayment options that suit our borrowers. To educate our customers, we have a robust in-app library of content that gives them tips on money management, we also do regular educational posts through our social channels and we collaborate with our customers who miss payment deadlines to reach a solution that works for them.” Iñigo-Mayo says.
To date, Tala’s in-app coaching has recorded over 43,000 readership hits in over 250 articles on healthy financial habits, globally.
Transparency, fairness, integrity, confidentiality, and an unwavering commitment to consumer protection – these are the pillars that sustain a strong and growing economy and which keep online predators at bay, as the President’s SONA said. These values likewise undergird Tala’s initiatives in financial literacy and resolute commitment to his administration and the regulators to ensure that consumers are safe, secure, and can enjoy a bright future.