BANK ACCOUNT AND E-WALLET REGULATION AND OTHER FINANCIAL REGULATION ACT

BANK ACCOUNT AND E-WALLET REGULATION AND OTHER FINANCIAL REGULATION ACT

Philippines recognize the vital role of the banking industry in the development and promotion of an effective and efficient financial system. With the advancement of technology, digital wallets (or e-wallets) have been introduced for the primary purpose of providing a digital platform for easy access to transact any type of business, including the transfer of funds in banking institutions. This is bolstered by the fact that with our way of living during this pandemic, people preferred to use mobile payment apps for goods and services in their daily transactions.

The number of violations of cybercrime and other crimes relating to electronic commerce (e-commerce) is rising.

The number of violations of cybercrime and other crimes relating to electronic commerce (e-commerce) is rising. Reports from the Philippine National Police (PNP) – Anti Cybercrime Group (ACG) indicate that there is an alarming and significant increase in the commission of fraud through online scams showing that 98.4% of reports of crimes and losses filed by banks from March 15 to May 18, 2020, alone, amounted to a total loss of P60.6M. With this, there is an imperious need for a law in order to protect the interest of the financing industry and of the public.

Senator Grace Poe introduced Senate Bill No. 2380 otherwise known as the Bank Account and E-wallet Regulation Bill

Senator Grace Poe introduced Senate Bill No. 2380 otherwise known as the Bank Account and E-wallet Regulation Bill in the 3rd regular session of the Senate. The bill seeks to regulate the use of bank accounts and e-wallets in the midst of the rising number of cybercrime cases in the Philippines. It also protects the public against fraud perpetrated by certain individuals or groups of persons with the intention of acquiring proceeds through illegal and unlawful activities. Pursuant thereto, among the common illegal activities and/or transactions are “phishing” and “money mules.”

Among the common illegal activities and/or transactions are “phishing” and “money mules.”

According to the bill, “phishing” refers to a social engineering scheme of posing as a legitimate or trusted entity, or as a representative of a legitimate or trusted entity mainly through electronic communication in order to obtain sensitive identifying information of another by illegally accessing an individual’s online account. On the other hand, it shall be prohibited for any person to act as a money mule. Specifically, the bill enumerates acts constituting “money mule” – the proceeds of which were derived from suspicious activity or cyber crime, to wit:

  1. Opening a bank or e-wallet account and using or allowing the use thereof, to receive and transfer or withdraw proceeds;
  2. Buying or renting a bank or e-wallet account for the purpose of receiving and transferring or withdrawing proceeds;
  3. Selling a bank or e-wallet account for the purpose of receiving and transferring proceeds;
  4. Account takeover or using or borrowing a bank or e-wallet account for the purpose of receiving or transferring or withdrawing proceeds;
  5. Recruiting, enlisting, contracting, hiring or inducing any person to electronically obtain, receive, acquire and transfer or withdraw money, funds, or proceeds; or
  6. Recruiting, enlisting, contracting, hiring or inducing any person to electronically obtain, receive, acquire and transfer or withdraw money, funds, or proceeds.

The unprecedented rise of the use of digital wallets is undeniable and the risks of use are also increasing. Thus, with the enactment of the bill, it will not only protect the general public against fraudulent activities arising from online banking but also offer the security of personal data and information of the transacting public. By virtue thereof, the bill will further strengthen the integrity of the banking sector and other financial institutions. 

Written by: Ria Yzabela Marquez

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