National Unity Party (NUP) president LRay Villafuerte believes that Republic Act (RA) 12010 will go a long way in shoring up defense of the domestic digital infrastructure for the protection of our netizens, many of whom are worried about falling prey to online financial scams amid the Philippines’ unwanted reputation as a cybercrime hotbed in the world.
Villafuerte said that President Marcos’ enactment of RA 12010 is “a timely protection for our people who do financial transactions online, as recent studies indicate that the Philippines has the unenviable reputation of having the highest incidents of suspected digital fraud or cyber threats in the world, and that Filipinos are most concerned about being victimized by digital fraud.
As a crime deterrence, said Villafuerte, this new law slaps heavier penalties on online scams, including the reclassification of online financial fraud committed in bulk or on a largescale basis as a crime of economic sabotage, punishable with life imprisonment and a cash fine of up to P5 million.
“Banks have beefed up their efforts in fighting cybercrimes amid the surge in online financial transactions during and after the pandemic,” Villafuerte, a co-author of the newly signed RA 12010 or the “Anti-Financial Account Scamming Act (AFASA),” said.
“But the fact remains that the deterrence of Internet-based crimes needs supporting legislation to further prevent people resorting to online transactions from falling prey to cyber criminals in the face of the surging incidents of digital fraud, especially in the Philippines,” he said. “Hence, the propitious enactment of RA 12010 as one safeguard for Filipinos who do online financial transactions.”
As such, he said, RA 12010 declares as a state policy the protection of the public against cybercriminals who target financial accounts, electronic or e-wallets and other online financial accounts, or lure account holders into committing fraudulent activities, by regulating the use of these online tools for payments and other financial transactions via the Internet.
Before the enactment of RA 12010, Villafuerte said our country didn’t have any law penalizing the use of financial accounts as an accessory to a financial crime.
But with this new law signed by President Marcos last July 20, Villafuerte said that online fraud such as “money mules,” “phishing,” “smishing” and “vishing” are now classified as punishable offenses.
“And with the deleterious effect on our economy and our people of largescale digital fraud by syndicates on countless Filipinos, such illegal actions are now classified as heinous crimes of economic sabotage punishable with life imprisonment and a fine of P1 million to P5 million,” he said.
In his third State of the Nation Address (SONA), the President said this law will further protect the public by “heightening the responsibility and security systems of banks and financial institutions, and imposing high criminal liabilities on social engineering schemes and money mules.”
The Philippines was ranked No. 1 in the 2023 Asia Scam Report with an online scam rate of 35.9%, according to CitizenWatch Philippines.
Early in July 20, during the AFASA’s ceremonial signing into law, the President said that RA 12010 is needed at this time when cybercriminals use technology to defraud fellow Filipinos,” as “it will protect our people from falling prey to perpetrators who target their banks and e-wallet accounts … we can deter the majority of the financial scams that we have been seeing while at the same time fostering greater trust in our digitization efforts.”
For Bangko Sentral ng Pilipinas (BSP) Gov. Eli Remolana Jr., RA 12010 will not only combat financial cybercrimes and safeguard the interests of financial consumers, but will also “uphold the integrity of the financial system … This will help us strengthen consumer protection and foster trust and confidence in the Philippine financial system.”
This law authorizes the BSP to investigate cases involving violations of the law, apply for cybercrime warrants and orders, and request the assistance of the National Bureau of Investigation (NBI) and the Philippine National Police (PNP) in investigating cases.
Villafuerte said that RA 12010 defines “money mule” as any person who acquires, receives, withdraws or transfers money or funds derived from crimes or “social engineering schemes,” which refers to the use of electronic communication to request or dupe anyone into providing sensitive personal information with the intent to defraud that person.
“Phishing” involves the commission of scams through the use of fake e-mails; “smishing,” through sending bogus short messaging service (SMS) or texts; and “vishing,” by way of fraudulent telephone or voice calls.
Under RA 12010, Villafuerte explained that offenses are now classified as economic sabotage under this law if committed by a syndicate or at least three persons in cahoots with each other, done in bulk or on a large scale, and executed through mass mailing or sent to at least three people individually or as a group.
For violators whose offenses do not fall under the category of economic sabotage, he said the penalties against them under this law range from imprisonment of prision correccional or six months and one day to six years to prision mayor or six years and one day to 12 years, or a fine of P100,000 to P500,000.
This law was based on the consolidated version of the House-approved House Bill (HB) No. 7393 and the Senate-approved Senate Bill (SB) No. 2560, which both legislatives chambers ratified prior to submission to Malacañan Palace last July for the President’s approval.
HB 7393 had consolidated 2 similar bills introduced in the bigger chamber, including HB 2013 that the NUP president had authored with fellow CamSur Reps. Miguel Luis Villafuerte and Tsuyoshi Anthony Horibata plus Bicol Saro Rep. Brian Raymund Yamsuan.
Within 60 days from the effectivity of this Act, the Bangko Sentral ng Pilipinas (BSP), in coordination with the Departments of Justice (DOJ) and of Information and Communications Technology (DICT), National Bureau of Investigation (NBI) and PNP shall craft its implementing rules and regulations (IRR).
The PNP recorded over 19,000 cybercrime incidents in 2023—up 70% from the previous year’s volume—with about 14,000 of these related to online scams.
In light of the surge in real-time payments (RTP), FICO—a global analytics software company based in Bozeman, Montana, USA—said that its recent study showed that the top concern of a third of its Filipino respondents were most concerned about being victimized by financial scams.
About 35% of Filipino respondents in the FICO survey said they were worried about the risk of being tricked into money to cyber criminals, which lead to instant and irrevocable financial losses.
Its study on trends in authorized push payment (APP) fraud and RTP in the Philippines showed that 82% of Filipinos have received unsolicited text messages, e-mails or phone calls that they suspected to be part of a scam, FICO said in a report.
Sixty-one (61)% of those surveyed said their friends or relatives had been affected, while about 74% of those who were scammed using RTP lost up to P25,000 each and one (1)% lost P300,000.
The other main concerns on financial crimes of the respondent Filipinos, said FICO, were being victimized by identity theft, their bank accounts being taken over by hackers or fraudsters, their credit or debit cards being stolen, and being tricked into buying stuff from online retailers or advertisers who never deliver the goods.
A recent report by Moscow-based global cybersecurity firm Kaspersky bared that the Philippines listed the highest increase in cyber threats in Southeast Asia in 2023, posting the highest increase in web threats at 243% to 1.69 million incidents—as against the 86% increase to 1.65 million incidents in Singapore and the 24% hike in Thailand to 1.53 million incidents.
As for Makati-based global intelligence network TransUnion, it revealed that 8.3% of all digital transactions in 2023 where the consumers were in the Philippines were suspected of being digital fraud—or 66% higher than the global rate of 5% for suspected digital fraud last year.
TransUnion’s global intelligence network found in its 2024 State of Omnichannel Fraud Report that 8.3 percent of all digital transactions where the consumer was in the Philippines were suspected to be digital fraud in 2023.
Also, the Philippines topped the list of online shopping scams in the 2023 Asia Scam Report, which the The Netherlands-based Global Anti-Scam Alliance did in tandem with Taiwan-based tech security company Gogolook.
The Philippines was ranked No. 1 in the 2023 Asia Scam Report with an online scam rate of 35.9%, according to CitizenWatch Philippines.
