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Philippines: Financial cyber attacks surge by 2,324% in 2020
MANILA, Philippines — Losses based on complaints filed with the Bangko Sentral ng Pilipinas (BSP) amounted to P2 billion between 2019 and 2021, underscoring the need for a new law that protects financial consumers.
BSP Governor Benjamin Diokno told members of the Senate committee on banks, financial institutions and currencies that the declared amounts in the complaints received last year alone reached P540 million.
At the height of the pandemic in 2020 and 2021, Diokno said that a total of 42,456 complaints were elevated to the BSP Consumer Assistance Mechanism.
“A majority of these cases have been deemed closed. But the process was long and arduous. And for many complaints, the resolutions were unfavorable to the consumer,” the BSP chief said.
He cited the case of a father of two young children and an economic frontliner, who lost his savings after a fraudster obtained his account information and made unauthorized fund transfers.
He also cited a small business owner who was billed with an increased amortization on her loan account, and lost to the financial institution after challenging the reasonableness of the fees and charges.
Diokno said hacking and other malware attacks surged by a whopping 2,324 percent in 2020 from 2019, while phishing and other social engineering schemes soared by 302 percent.
Diokno also reported that account takeover or identity theft rose by 2.5 percent, while Card Not Present fraud fell by 26.8 percent.
On the other hand, he said skimming and ATM-based cyber fraud losses significantly declined from 2018 to 2021 due to the implementation of the EMV chip technology, but fraud actors were quick to shift their tactics.
For 2021, Diokno said complaints related to the use of internet banking and mobile banking accounted for 45.2 percent of the total number of complaints.
“Hackers and scammers took advantage of the digital infrastructure and consumer vulnerability to perpetrate crime. Based on BSP monitoring, the increased use by the public of digital financial services has given rise to a wave of cyber and financial crimes,” he said.
During the deliberations at the Senate, Diokno stressed the importance of the passage of the Financial Consumer Protection Act to protect Filipinos making financial transactions.
“Clearly, all of us as financial consumers, are exposed to various risks, frauds and cyber threats that could result in loss of income. Worse, it could result in loss of confidence in the financial system,” Diokno said.
On top of providing an armor of protection to all financial consumers, Diokno said the proposed bill would ensure that relevant government institutions and financial regulators are fully equipped with the legal authority to enforce prudent, responsible and customer-centric standards of business conduct.
With the new law, he said financial regulators would be able to impose sanctions on business practices and entities that pose grave and irreparable injury to financial consumers, deterring frauds and scams.
The proposed bill provides financial consumers with new, immediate and efficient avenues for redress, by granting financial regulators adjudicatory authority to conduct hearings on consumer complaints.
“This proposed measure provides alternate, less cumbersome legal recourse for financial consumers. Consumer complaints can be escalated and resolved at the level of the financial regulators, ensuring quick resolutions, hence de-clogging court dockets. Existing courts may then focus on more pressing matters,” Diokno said. – Paolo Romero
Source: https://www.philstar.com/business/2022/01/18/2154527/financial-cyber-attacks-surge-2324-2020