BSP eyes protocol to reverse fraudulent transactions
The Bangko Sentral ng Pilipinas (BSP) is drafting an industry-wide protocol that banks and other financial institutions can follow in reversing fraudulent transactions, part of a broader effort to strengthen consumer protection and speed relief for scam victims.
BSP Deputy Governor Mamerto Tangonan said the central bank aims to craft a “more straightforward” framework that would give the industry and scam victims clearer and more reliable timelines for recovering stolen funds.
“As we speak, we are working with the industry to establish that protocol on how transactions may be reversed and the funds returned to the victim,” Tangonan told members of the Chamber of Thrift Banks on Monday.
“It can now be done bilaterally, but it’s better if there is a protocol common to all,” he added.
Under the Anti-Financial Account Scamming Act, or Afasa, financial institutions may temporarily hold funds involved in disputed transactions to prevent fraud.
Banks must then update clients on the status of complaints, including whether the disputed funds were held—up to five calendar days—and the next steps for extending the hold or recovering the money.
BSP data showed social engineering schemes—in which criminals manipulate victims into revealing sensitive information that enables fraudulent transactions—emerged as the Philippines’ most prevalent cybersecurity threat last year, accounting for 76 percent of total fraud losses.
Hacking ranked second, responsible for 13 percent of the funds stolen.
Card-not-present fraud, once the country’s most common cybercrime, made up 8 percent of losses last year. Under the scheme, scammers obtain victims’ payment details without a physical card being presented to merchants, allowing criminals to carry out fraudulent transactions.
BSP Deputy Governor Lyn Javier, who heads the central bank unit regulating financial firms, earlier said the trend reflected how cyber risks are evolving from attacks on technical vulnerabilities to schemes that exploit the “human element.”
The shift, she warned, poses growing challenges for regulators, as a major cyberattack could erode public trust in the financial system and potentially trigger bank runs that can create liquidity and capital strains for institutions.
