BSP reminds bank clients of right to ‘cooling off’ period

Clients of financial institutions supervised by the Bangko Sentral ng Pilipinas (BSP) may cancel contracts without penalty under their right to "cooling-off," the central bank said on Friday.

Under the right to "cooling-off," clients of BSP-supervised financial institutions (BSFIs) are given the right to cancel a contract without penalty within two days from signing the contract.

"BSFIs should give their clients at leat two banking days from the signing of the contract to cancel," the central bank said in a statement.

"This right to cooling-off is one of the key requirements of the new BSP Financial Consumer Protection Regulation that seeks to empower clients by giving them the opportunity to reconsider long-term investment decisions," it added.

However, this right is only applicable to individuals. It does not cover corporations, partnerships, and associations.

"This shall cover investment in long-term financial instruments with a remaining term of at least one year," the BSP said.

These investments include government securities, corporate bonds, and long term negotiable certificate of deposit (LTNCD).

Clients who wish to terminate the agreement must notify the BSFI his intention which must be put into writing, within the cooling-off period.

"The client shall shoulder only reasonable amount of processing or administrative fees plus any mark to market costs from the signing of the contract up to its cancellation," the BSP said.

The respective BSFIs will also have to disclose these costs under the mandate of the BSP. -Jon Viktor Cabuenas/NB, GMA News