Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
Third Regular Session

owe Ba No,_5965

Introduced by HONORABLE SCOTT DAVIES S. LANETE, M.D.

EXPLANATORY NOTE

According to a news article,' the Bangko Sentral ng Pilipinas (“BSP”) confirmed that
incidents of automated machine teller (“ATM”) fraud have been on the rise the past few
years, From 2012 to 2013, it was reported that bank depositors lost nearly P400 million from
‘automated machine teller ATM fraud

Although BSP has issued regulations imposing stricter security measures, a long-term
solution is not yet in place. ‘The banking industry also had adopted measures to protect itself
and its customers, by installing hand shields or similar initiatives to block illegal surveillance
cameras installed by criminals to view card users’ security access numbers or personal
identification number (PIN) when making a withdrawal and detecting devices in the machine
itself where the ATM card is inserted. These have resulted in the successful tracking of
fraudulent withdrawals, However, it takes banks a long period of time to detect the fraud and
retum the money withdrawn, This has caused depositors the same amount of time before they
could withdraw and use their money.

‘Thus, the problem has not been resolved and has even escalated despite the tighter measures
adopted, ATM machines, not computer systems, are the targets of fraud, according to BSP.
Therefore, the passage of a bill mandating banks to inform the ATM owners by SMS or e-
mail once an attempt to withdraw is made from the card, Through this security measure, the
owner is alerted immediately and as soon as withdrawal of amounts is made from his/her
card, This is a more effective and immediate measure of protection considering that at
present, the owner is only informed of any suspicious or fraudulent withdrawal from his/her
account when he/she personally checks his account, By putting in place another layer of
security informing the owner by SMS or e-mail that there is an attempt to withdraw from
his/her which he/she must confirm to complete the transaction-fraudulent transac
prevented. Hence, the passage of this law is urgently sought

SCOTT DAVIES S, LANETE, M.D.
‘epresentative
‘Third District, Province of Masbate

\Maki Pulido, Bangko Sentral notes rise in ATM fraud, GMA News, 8 May 2015, available at
http://www, gmanetwork.com/news/story /483910/ economy /moneyandbanking/ bangko-sentral:
notes-rige-in-atm-fraud


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
Third Regular Session

5965

House Bill No.

Introduced by HONORABLE SCOTT DAVIES S. LANETE, M.D.

AN ACT MANDATING THE BANKS TO NOTIFY ATM OWNERS BY SMS OR
E-MAIL OF WITHDRAWALS FROM THEIR ACCOUNTS, ESTABLISHING A
MECHANISM THEREFOR AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

Section 1. Short Title. This Act shall be known as “ATM Withdrawal Security Act of 2015.”

Sec, 2. Declaration of Policy. \t is the policy of the State to serve and protect the people, to
maintain peace and order, to protect life, liberty, and property, and to promote the general
welfare

Sec. 3. Definition of Terms.

a, Automated Teller Machine (ATM) shall mean a machine at a bank or other location,
which enables a bank customer to perform basic banking activities such as, but not
limited to withdrawal, transfer of funds, checking of balance during or even after
banking hours.

b, Short Message Service (SMS) shall mean texting, sending text messages or text
messaging which allows for short text messages to be sent from one cell phone to
another cell phone or from the Web to another cell phone

¢. Electronic Mail (E-mail) shall mean a message sent electronically from one computer
to another or from one cell phone to a computer.

ATM Owner refers to the person whose name appears on the ATM card

¢. Confirmation Period shall mean a period of twenty four (24) hours counted from the
time of withdrawal

Sec. 4, Notification by SMS or E-mail, It shall be mandatory for all banks to notify the
ATM owner of any attempt of withdrawal of at least Twenty Thousand Pesos
(Php20,000.00), whether in savings or current account, in the Philippines or abroad. For
this purpose, every account holder shall be required to inform the bank of his or her
mobile phone number and email, and any changes thereto.

Sec. 5. Confirmation by the ATM Owner. ‘The withdrawal from the savings or current
account shall only be recorded and debited by the bank once the ATM owner confirms
the withdrawal by SMS or E-mail within the Confirmation Period, Failure by the ATM



owner to confirm a withdrawal within the Confirmation Period shall mean waiver on his
or her part to question its validity

Sec. 6. Mechanism for the Notification by SMS or E-mail. The banks shall develop and
thereafter, adopt a unified manner for the required notification and confirmation under
this Act, The banking industry shall work with the current telecommunications provider
in developing the said unified system.

Sec, 7, Implementing Agencies. The Bangko Sentral ng Pilipinas in cooperation with the
Department of Transportation and Communications shall ensure the implementation and
enforcement of this Act.

See, 8, Penalties,

a. Any bank or banking institution who neglects or fails to give the notification required
under this Act shall be punished with a fine of not less that Five Hundred Thousand
Pesos (PhpS00,000,00) but not more than One Million Pesos (Php!,000,000.00),
without prejudice to the filing of appropriate administrative, criminal or civil charges
against them.

b. Any bank or banking institution who records and debits a withdrawal within the
confirmation period without the required confirmation from the A'TM owner shall be
punished with a fine of not less that Five Hundred Thousand Pesos (Php500,000.00)
but not more than One Million Pesos (Php1,000,000.00), without prejudice to the
filing of appropriate administrative, criminal or civil charges against them.

Sec 9. Implementing Rules and Regulations. The Bangko Sentral ng Pilipinas and
Department of Transportation and Communications shall have the power to promulgate
the implementing rules and regulations as may be necessary to fully implement the
objectives and purposes of this Act within one (1) years from the approval hereof.

Sec. 10. Separability Clause, If any part or provision of this Act shall be held
unconstitutional or invalid, other provisions which are not affected thereby shall continue
to be in full force and effect.

Sec. 11. Repealing Clause, All laws, issuances or parts thereof inconsistent with this Act
are hereby repealed or modified accordingly.

Sec. 12. Effectivity: This Act shall sake effect fifteen (15) days after its publication in the
Official Gazette or in at least two (2) newspapers of general circulation.

Approved.