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Philippine credit card group wants tighter regulations on SIM card registration

The Credit Card Association of the Philippines (CCAP) is calling for tighter regulations to address the increase in fraudulent transactions due to SIM card swaps.

The CCAP said it has sent separate letters to Globe Telecom Inc., Smart Communications Inc., the National Telecommunications Commission (NTC), and the House of Representatives to institute measures to prevent more schemes in the future.

“The industry has been experiencing high volumes of fraud cases causing financial detriment. These perpetrators have carried out fraud by using the various digital payment platforms to commit crime,” CCAP Executive Director Alex Ilagan said in an emailed statement.

According to the CCAP, fraudulent credit card activities through remote and other digital payment channels have surged by 21% in the country since the COVID-19 pandemic started.

The higher number of incidents involve the ‘Virtual Account Take Over’ scam, where fraudsters gain access to one time passwords (OTPs) of unknown customers to perform online transactions.

“We respectfully request that this be addressed urgently. Perpetration of a successful unauthorized sim swap will affect both the telco’s and the banks’ customers, resulting in financial losses, loss of public trust and confidence, and close scrutiny from the regulators,” the CCAP said.

To recall, Sy-led lender BDO Unibank Inc. last month acknowledged a “sophisticated fraud technique” which affected some of its clients. The funds were then reportedly transferred to accounts under different banks and mobile wallets, and used to acquire cryptocurrencies.

BDO has already started to process the reimbursement to close to 700 clients affected by the unauthorized bank transfers.

One of the banks the funds were supposedly transferred to is the Union Bank of the Philippines which has since identified at least six personalities behind the hacking incident, and reported the necessary information to local authorities.

“To date, there are no existing laws which protect the consumers from this mode of attack from the fraudsters,” the CCAP said, as it pushed for the sim card registration act.

“We believe that the passage and implementation of this law will greatly deter the activities of the fraudsters as they will now have accountability from the use of these registered sim cards,” it added.

The CCAP also pushed for the NTC to establish a mechanism where Filipino consumers can actively report numbers being used for malicious intents.

“This standardized reporting mechanism is absent in today’s environment which leads hesitancy from the victims to properly report incidents to their respective banks or telecommunication providers,” it said. — RSJ, GMA News