Section 8Sec./Art. 8

Duties and Responsibilities of Financial Service Providers. -

(a)Board and Senior Management Oversight. -The Board of Directors and the members of senior management of financial service providers shall ensure conformity with this Act and shall provide the means by which they shall identify, measure, monitor, control, and manage consumer protection risk inherent in their operations, in accordance with the rules and regulations of their financial regulators.

(b)Appropriate Product Design and Delivery. -Financial service providers shall continuously evaluate their financial products or services to ensure that they are appropriately targeted to the needs, understanding and capacity of both their markets and their clients. This shall include among others, the following:

(1)Affordability and suitability assessments. -Financial service providers should have written procedures for determining whether a particular financial product or service is suitable and affordable for their clients. This shall include the determination of whether or not the amount and terms of the offered financial product or service allow various clients to meet their respective obligations with a low probability of serious hardship, and that there is a reasonable prospect that the financial product o r service will provide value to its client. For the purpose of extending credit, this assessment will include measures to prevent over-indebtedness.

(2)Cooling-off period. -Financial service providers are expected to adopt a clear cooling-off policy, as may be prescribed by law or by rules and regulations issued by the relevant financial regulator upon its determination that a cooling-off period is necessary for a particular financial product or service that is subject to its regulation. Such policy should, among others, provide a cooling-off period that will allow a client to consider the costs and risks of a financial product or service, free from the pressure of the sales team of the financial service provider.

The length of the cooling-off period should be individually determined by the financial service providers based on reasonable expectation of the time required for a client to fully evaluate all the terms and risks of the financial product or service and contact concerned parties who may be affected by its terms and conditions, unless a minimum or fixed period is prescribed by the financial regulator for compliance by the financial service provider or when stipulated in the terms of the financial product or service. Financial regulators may opt not to provide for cooling-off period for short-term transaction or contracts.

During the cooling-off period, the financial consumer may cancel or return the contract without penalty; however, nothing herein prevents the financial service providers from recovering the processing costs incurred, as may be approved by the financial regulators. Financial service providers are prohibited from engaging in practices that unreasonably burden the financial consumer in the exercise of the right of cancellation during the cooling-off period. If the financial product or service is a contract of insurance, a pre-need or a health maintenance organization (HMO) product, the right of return cannot be exercised after the financial consumer has made a claim.

(3)Pre-payment of loans and other credit accommodations. -A borrower may, at any time prior to the agreed maturity date, prepay a loan or other credit transactions in whole or in part:Provided,That costs or fees charged to the borrower for such pre-payment, if any, shall be disclosed to ensure transparency, disclosure, and responsible pricing as required under this section.

(c)Transparency, Disclosure, and responsible Pricing. -Financial service providers must ensure that they adopt disclosure principles in their communications and their contracts with financial consumers, including the use of clear and concise language to ensure that all information concerning the financial product or service is understood by the target clients. This shall also include updated and accurate disclosure of information such as pricing or any cost associated with the product or service, and should be made in a consistent manner to facilitate a comparison between similar financial products or services across the industry.

Sufficient product disclosure must be provided before the contracting of the financial product or service to give the client enough basis and time for review. Any change in the terms or conditions of a financial product or service shall be provided to the client.

In their advertising materials, financial service providers shall disclose the contact information of their consumer assistance unit providing consumer assistance and handling financial consumer complaints. Financial service providers shall also disclose that they are regulated and the advertising materials must identify the relevant financial regulator.

Financial service providers are legally responsible for all statements made in the marketing and sales materials that they produce relative to their financial products or services. Disclosure of information on financial products or services shall be made available to the public by the financial service provider through printed materials, mass media, websites or digital platforms.

Financial service providers must have internal policies and procedures for setting prices for their products and services that take into consideration, among others, the principle of responsible pricing.

(d)Fair and Respectful Treatment of Clients. -Financial service providers shall have the right to select their clients:Provided,That they shall not discriminate against clients on the basis of race, age, financial capacity, ethnicity, origin, gender, disability, health condition, sexual orientation, religious affiliation, or political affiliation:Provided, further,That financial service providers may provide distinction, as necessary, when making a risk assessment on a specific financial product or service.

Financial Service providers are prohibited from employing abusive collection or debt recovery practices against their financial consumers.

(e)Privacy and Protection of Client Data. -Each financial service provider must respect the privacy and protect the data of their clients. Consistent with the provisions of Republic Act No. 10173, otherwise known as the "Data Privacy Act of 2012", the financial regulators shall issue regulations in coordination with the National Privacy Commission, governing the disclosure of client data to a third party.

Clients have the right to review their data to ensure that inaccurate or deficient data is corrected or amended, refuse the sharing of their information to a third party and request the removal of their data from the service provider's system if they no longer wish to use the provider's services.

(f)Financial Consumer Protection Assistance Mechanism. -Each financial service provider must establish a single consumer assistance mechanism for free assistance to financial consumers on financial transactions concerns. This shall include handling of complaints, inquiries and requests.

A financial service provider must provide clear information on the actions taken or to be taken on a complaint, inquiry or request from a financial consumer. In the case of alleged disputed amount or unauthorized transactions, a financial service provider, pending the result of its final investigation report, shall suspend the imposition of interest, fees and charges, or provide similar reasonable accommodations to the financial consumer.

Financial consumers who are unsatisfied with the financial service provider's handling of their complaints, inquiries and requests, may elevate their concerns to the financial regulator which has jurisdiction over the financial service provider concerned.

(g)Information Security Standards. -Financial service providers shall adopt and implement information security standards to ensure the safety and protection of the confidentiality, integrity, availability, authenticity, and non-repudiation of the client's information and financial transactions and to ensure the data privacy of their clients. The financial regulators shall prescribe the minimum information security standards for compliance by all financial service providers.