On July 20, 2024, the Philippines enacted Republic Act No. 12010, also known as the Anti-Financial Account Scamming Act (AFASA)—a critical law aimed at curbing cyber fraud and financial account misuse in the digital age.
AFASA acknowledges the growing risk of cybercrime syndicates and money mule schemes amidst widespread adoption of electronic financial services. The law promotes responsible financial behavior and strengthens protections for financial account holders.
Prohibited Acts under AFASA
Section 4 of the law outlines what constitutes Financial Account Scamming:
1. Money Muling Activities
These involve knowingly using or allowing the use of financial accounts for laundering or fraud, including:
a. Using or lending your bank or e-wallet account
b. Opening fake accounts or using another person’s identity
c. Buying, renting, or selling accounts
d. Recruiting others to do the above
2. Social Engineering Schemes
Tactics involving deception to steal sensitive personal information for unauthorized account access:
a. Posing as a legitimate institution to collect user data
b. Using phishing emails or fraudulent messages to obtain details
3. Economic Sabotage
These offenses escalate to economic sabotage when:
a. Carried out by a group (3 or more)
b. Targeting multiple victims
c. Using bulk messaging tools (e.g., mass mailers)
d. Connected to human trafficking
Other Offenses under AFASA
The law also penalizes the following acts:
a. Aiding or attempting any offense listed above
b. Creating or using fake financial accounts
c. Buying or selling financial accounts
Responsibilities of Financial Institutions
a. Protect access to client accounts
b. Temporarily freeze funds under investigation (max 30 days, extendable by court order)
c. Coordinate verification with account holders and other institutions on flagged transactions
Role of the Bangko Sentral ng Pilipinas (BSP)
AFASA empowers the BSP to:
a. Investigate suspicious financial accounts
b. Share findings with law enforcement subject to the rules issued by BSP.
Penalties
AFASA imposes criminal liability—including imprisonment, fines, or both—on those found guilty of violating its provisions.
Why This Matters
This law reinforces the Philippines’ commitment to financial cybersecurity and AMLA compliance. For fintech companies, banks, and digital platforms, compliance with AFASA is now a legal and reputational imperative.
About the Authors
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