On March 24, 2023, the Bangko Sentral ng Pilipinas ("BSP") issued Circular No. 1169 providing for the Rules of Procedure for the Consumer Assistance Mechanism, Mediation and Adjudication of Cases in the BSP.
The Rules shall apply to all compaints filed after May 1, 2023 (the date on which the Rules became effective), provided that the cause or causes of action subject of the complaint accrued after June 3, 2022 (the date on which the Financial Products and Services Consumer Protection Act [the "FCPA"] took effect).
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CONSUMER ASSISTANCE MECHANISM:
1. What are the recourse mechanisms for financial
consumers?
The first-level recourse mechanism for financial
consumers who are dissatisfied with a financial product or service
is the BSP-Supervised Institution's
("BSI") Financial Consumer
Protection Assistance Mechanism
("FCPAM"). The second-level
recourse mechanism for financial consumers who have reported their
concerns to the BSI involved, through the BSI's FCPAM, and are
still not satisfied with how the BSI handled their concerns (or
whose concerns were not acted upon by the BSI's FCPAM within a
reasonable period), is the BSP Consumer Assistance Mechanism
("BSP-CAM"). The BSP-CAM is a
condition precedent to both the mediation and adjudication of
consumer complaints. If complainants remain unsatisfied after
resorting to BSP-CAM, they have the option to proceed to either
mediation or adjudication.
2. What is the scope of the Rule on Consumer Assistance
Mechanism (Rule III of Circular No. 1169)?
Rule III applies to all concerns relating to the financial
products and services of BSIs and/or violations of the provisions
of the FCPA. However, Rule III does not apply to certain cases that
are more properly resolved before another court or agency. These
include (but are not limited to) the following: (a) cases with an
application for provisional remedies under the Rules of Court; (b)
cases involving administrative and criminal sanctions under other
laws; (c) disputes which are not covered by banking or related
laws, or BSP rules and regulations (e.g., administrative policies
or labor/employment, and intra-corporate disputes) (d) cases that
are pending before, or which have already been decided by, another
court or quasi-judicial body; (e) cases involving disqualification
or administrative cases against directors, trustees, officers,
employees or third-party agents of the BSI, as covered by relevant
laws and BSP regulations; (f) claims against closed banks (which
are more properly resolved before the Philippine Deposit Insurance
Corporation ("PDIC") or
liquidation courts); and (g) cases where the resolution of BSP will
depend on the prior resolution of issues by the courts or other
government offices/agencies. Cases such as the foregoing shall be
dismissed by the BSP, without prejudice to refiling by the
complainant with the appropriate court or government agency.
3. Who is the Real Party-in-Interest in a CAM
proceeding?
The real party-in-interest is the party named in the records of
the BSI as the actual or prospective depositor, purchaser, lessee,
recipient of a financial transaction with a BSI; or the account
owner, credit card holder, borrower, lessee, mortgagor in an
existing or prospective financial transaction with a BSI. A party
may be represented in the BSP-CAM provided he submits a written and
signed authorization giving the representative authority to appear
and act on his behalf during the proceedings, with full power and
authority to bind the party on any matter. The representative need
not be a lawyer.
4. What is the process for BSP-CAM?
a. Filing: Financial consumers may submit their
complaints in the required format to the Consumer Protection and
Market Conduct Office ("CPMCO")
either personally or through BSP Online Buddy
("BOB") Chatbot, postal mail,
courier, electronic mail, or through other electronic means, or
with the nearest BSP Regional Offices or Branches. The complaint
must show that the complainant has previously availed himself of
the BSI's FCPAM.
b. Exchange of replies: The BSP shall acknowledge receipt
of complaints. The acknowledgment may include a request for
additional details or relevant documents and records to support the
claim. The BSI and the complainant are given the opportunity to
exchange their answer, reply and rejoinder, as the case may
be.
c. Escalation to Mediation and/or Adjudication. CPMCO
shall offer the complainant the option of resolving the dispute
through mediation. If the complainant consents within the
prescribed period of five days from the offer, the CPMCO shall
refer the matter to the Consumer Complaints Resolution Office
("CCRO"). Otherwise, if the
complainant does not consent to mediation, the BSP-CAM shall be
terminated.
d. Termination of the BSP-CAM. The BSP-CAM may also be
terminated in the following circumstances:
i. where the complainant or their duly authorized representative
submits a notice of voluntary withdrawal with the CPMCO;
ii. if no further communication from the complainant is received
by CPMCO within 30 days from the date of the BSI's last
response;
iii. if the BSI fails to provide its: answer or rejoinder to the
complainant within the prescribed periods;
iv. If the complainant and the BSI voluntarily agree to proceed
directly to mediation;
v. If after two replies, the complainant remains dissatisfied with
the BSI's response, and the complainant requests, in writing,
for mediation and/or adjudication.
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MEDIATION:
1. What is mediation?
Mediation is an intervention by which the BSP, through its duly
authorized mediation officers, facilitates communication and
negotiation between the parties, and assists them in reaching a
mutually acceptable settlement. It is voluntary in nature and a
strictly confidential process.
2. What is the scope of the Rule on Mediation (Rule
IV)?
Rule IV applies to all concerns relating to the financial products
and services of BSIs and/or violations of the provisions of the
FCPA. Rule IV shall also not apply to cases not covered by Rule
III. If the case falls under any of the out-of-scope cases, BSP
shall dismiss the complaint without prejudice to refiling by the
complainant with the appropriate court or government agency.
3. Who is the Real Party-in-Interest in a Mediation
proceeding?
Similar to Rule III, the real party-in-interest is the party named
in the records of the BSI as the actual or prospective depositor,
purchaser, lessee, recipient of a financial transaction with a BSI;
or the account owner, credit card holder, borrower, lessee,
mortgagor in an existing or prospective financial transaction with
a BSI. A party may be represented in the Mediation proceedings
provided they submit a Special Power of Attorney authorizing the
representative to appear and act on their behalf during the
proceedings, with full power and authority to bind the party on any
matter. The representative need not be a lawyer.
4. What is the process for Mediation
proceedings?
a. Initiation. Mediation may be commenced upon referral
by the CPMCO of the financial consumer complaint to the CCRO.
Mediation may also be initiated by the parties upon termination of
the BSP-CAM by submission to the CPMCO of a written request to
undergo mediation signed by both parties.
b. Schedule of Mediation. The Mediator shall issue a
Notice of Mediation within 10 days from receipt by the CCRO of the
referral of CPMCO. The date of the initial mediation conference
shall be set within 10 days from the expiry of the period to issue
a Notice of Mediation, unless the Mediator deems that there is a
justifiable reason to set it at a later date.
c. Mediation Proceedings. The mediation proceedings shall
be conducted virtually or through online video conferencing.
Parties who opt for in-person or face-to-face mediation may send a
written request to the Mediator stating the reasons for such
request. If conducted online, the online video conference shall
only use the BSP-prescribed platform. The parties shall be properly
identified and visible during the online video conference. If
conducted in person, the mediation proceedings may be held at BSP
Head Office or in any of the BSP Regional Offices or BSP Branches,
as may be determined by the Mediator.
d. Mediation Period. The mediation period shall be for a
period of 30 days reckoned from the date of the initial mediation
conference. For meritorious reasons and as agreed upon by the
parties, a longer period may be allowed. If any of the parties fail
to appear in two consecutive scheduled mediation sessions despite
due notice and without any valid reason, it shall be a ground for
termination of the mediation proceedings and the Mediator shall
issue a Notice of Termination of Mediation.
e. Termination of Mediation
i. Successful Mediation. The parties shall execute a
Settlement Agreement signed by them or their representatives the
prescribed BSP form annexed to BSP Circular 1169. The Settlement
Agreement shall be attested by the Mediator.
ii. Failure of Mediation. If the parties are unable to
settle their dispute, the Mediator shall declare a failure of
mediation and terminate the proceedings by issuing a Notice of
Termination of Mediation.
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ADJUDICATION:
1. What is the jurisdiction of the BSP for adjudicating
financial consumer complaints?
The BSP shall have jurisdiction over actions filed before the CCRO
for financial consumer complaints arising from, or in connection
with, financial transactions that are purely civil in nature, and
the claim or relief prayed for is solely for payment or
reimbursement of a sum of money not exceeding PhP10 million in
total, exclusive of legal interest, attorney's fees, and costs
of suit. Except as to the amount of actual claim, legal interest,
attorney's fees, and costs of suit, no other form of damages
shall be recoverable.
If the total amount of the claim or relief prayed for exceeds
PhP10 million, it shall be dismissed unless the complainant waives
the principal claim exceeding PhP10 million.
2. What is the scope of the Rule on Adjudication (Rule
V)?
Rule V applies to matters of financial consumer complaints filed
before the CCRO that fall under the jurisdictional amounts
discussed above.
Rule V shall also not apply to cases not covered by Rule III. In
addition, Rule V (Adjudication) shall not apply to the following
cases:
a. cases involving questions on the financial product or service
where the relief sought is to avoid or prevent payment of a sum of
money to the BSI relative to the said financial product or
service;
b. cases in which the relief sought is other than payment or
reimbursement;
c. counterclaims, crossclaims and third (fourth, etc.)-party
complaints;
d. complaints on general pricing, product features, credit or
underwriting decisions, or applications to restructure or
reschedule a loan or financing pertaining to commercial loan
transactions, unless the BSP prescribes a specific regulation on
the matter; and
e. cases where the subject matter of which is incapable of
pecuniary estimation.
If the case falls under any of the out-of-scope cases, the BSP
shall dismiss the formal complaint without prejudice to refiling by
the complainant with the appropriate court or government
agency.
For cases falling under the concurrent jurisdiction of the BSP,
Cooperative Development Authority
("CDA"), Insurance Commission
("IC"), and/or Securities and
Exchange Commission ("SEC"), as
provided under the FCPA, BSP shall dismiss the complaint if CDA,
IC, or SEC has already acquired or assumed jurisdiction over the
subject matter.
If the financial product or service subject of the formal
complaint is primarily or substantially regulated by another
financial regulator, the BSP shall dismiss the formal complaint and
refer the same to the financial regulator having jurisdiction over
the financial product or service.
3. What is the nature of the proceedings before the
BSP?
The proceedings before the BSP shall be summary and non-litigious
in nature. The technical rules of procedure applied before the
courts of law shall not apply, and the Adjudicator may avail all
reasonable means to ascertain the facts of the controversy. In the
exercise of its adjudicatory powers, the Adjudicator shall have the
power to issue subpoena duces tecum, summon witnesses, and
when appropriate, to order the examination, search, seizure and
production of all documents, books of accounts, and records,
whether physical or digital, of any entity or person under
investigation as may be necessary for the proper disposition of
cases.
4. Who in the Real Party-in-Interest in adjudication
proceedings?
Similar to Rule III, the real party-in-interest is the party named
in the records of the BSI as the actual or prospective depositor,
purchaser, lessee, recipient of a financial transaction with a BSI;
or the account owner, credit card holder, borrower, lessee,
mortgagor in an existing or prospective financial transaction with
a BSI.
A party may be represented in the adjudication proceedings
provided they submit a Special Power of Attorney authorizing the
representative to appear and act on their behalf during the
proceedings, with full power and authority to bind the party on any
matter.
5. What is the process for Adjudication
proceedings?
a. Commencement. The action commenced by filing with the
CCRO a formal complaint in the form prescribed by the BSP (annexed
to BSP Circular 1169), accompanied by a Verification and
Certification of Non-Forum Shopping, and supporting
documents.
b. Summons. If the formal complaint is sufficient in form
and substance, the Adjudicator shall issue summon directing the
respondent to submit a verified Answer.
c. Answer. The respondent shall serve on the complainant
and file with the CCRO a verified Answer within a non-extendible
period of 30 days from receipt of summons. The Answer shall be
accompanied by certified true copies of documents, as well as
affidavits of witnesses and other evidence.
If the respondent fails to file an Answer, the Adjudicator may
proceed to render a decision based on the allegations and evidence
of the complainant. The Adjudicator may also conduct the
proceedings ex parte.
d. Preliminary Conference. Within 15 days from receipt of
the Answer, the Adjudicator shall issue a notice to the parties or
their authorized representative directing them to appear in the
Preliminary Conference.
The Preliminary Conference shall be called for the purpose
of:
i. Discussing the possibility of an amicable settlement;
ii. Defining, simplifying, or clarifying the issues in the
case;
iii. Entering into admissions and stipulations of facts and
documents;
iv. Confirmation of the pre-markings on the evidence of the
parties; and
v. Taking up such other matters which may aid the Adjudicator in
the prompt disposition of the case.
The failure of the complainant to appear at the preliminary
conference without valid ground shall cause the dismissal of the
formal complaint without prejudice. Meanwhile, the failure of the
respondent to appear in the preliminary conference without valid
ground shall be the cause to allow the complainant to present his
case ex parte and the Adjudicator to render judgment on
the basis of documents and evidence presented.
e. Preliminary Conference Brief. The parties are required
to file with CCRO and furnish each other in such a manner that
shall ensure their receipt thereof at least five days before the
date of the preliminary conference, their respective Preliminary
Conference Briefs.
The failure to submit the Preliminary Conference Brief shall have
the same effect as the failure to appear in the preliminary
conference.
f. Preliminary Conference Order. After the preliminary
conference, the Adjudicator shall issue the Preliminary Conference
Order detailing the matters taken up during the preliminary
conference, the actions taken, and the agreements or admissions
made by the parties.
g. Filing of Position Papers. The Adjudicator shall issue
an order directing the parties to simultaneously submit their
respective position papers, together with the supporting affidavits
and/or documentary evidence, on a date set by the Adjudicator
within 30 days from the date of termination of the preliminary
conference.
Failure of a party to file a position paper within the given
period shall be deemed a waiver of the right to file the
same.
Upon the submission of the position papers or the lapse of the
period to submit, the case shall be deemed submitted for decision
unless the Adjudicator calls for a clarificatory hearing.
h. Clarificatory Hearing. This hearing may be done
personally or through video conferencing to elicit facts or
information for the prompt and just resolution of the case. During
the clarificatory hearing, a party may raise clarificatory
questions which shall only be coursed through the Adjudicator. The
Adjudicator has the discretion to require an answer or response,
depending on the question's relevancy and materiality to the
issue.
i. Decision. The Adjudicator shall render a decision
within 60 days from the issuance of the order submitting the case
for resolution. The period of time to resolve may be extended, for
good cause, upon approval of the CCRO Director.
j. Execution of Decision. The Adjudicator shall issue a
writ of execution directing the sheriff of the relevant court to
enforce the decision or order. The Writ of Execution shall be
effective for a period of five years from the date of issuance.
After the lapse of five years, the decision or order shall become
dormant, and an award may only be enforced by filing an independent
action before the CCRO within a period of 10 years from the date of
its finality.
6. Can parties enter into a compromise agreement? If
yes, what would be the effect if the parties decided to
compromise?
Yes, the parties may enter into a compromise agreement at any time
before the case is deemed submitted for decision. A compromise
agreement shall be final and executory unless an action for
nullification of the compromise has been filed before the proper
court. A compromise based on the terms stated therein shall have
the same effect as a determination on the merits of the
complaint.
7. What are the remedies available to a party against
whom the case is decided?
A party may move for a reconsideration of a decision or order of
the Adjudicator within 10 days from receipt thereof. A second
motion for reconsideration shall not be allowed.
A motion for reconsideration shall be based on any of the
following grounds:
i. Evidence is insufficient to justify the decision or final
order; or
ii. Decision or final order is contrary to law.
A comment on, or opposition to, the motion may be filed within 10
days from receipt thereof.
8. When does the decision become final?
The decision shall be final and executory after the lapse of 10
days from receipt thereof by the parties unless a motion for
reconsideration is filed. After the decision or order becomes final
and executory, the same shall be entered in the book of entries of
judgments.
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