Republic of the Philippines
HOUSE OF REPRESENTATIVES.
Quezon City

SIXTEENTH CONGRESS
Second Regular Session

House BILLNO. 5036

Introduced by HON. ROMAN T, ROMULO

EXPLANATOR'

‘OTE

‘The banking industry, among others, has taken advantage of modern technology
in order to offer their services in a more convenient and simplified manner. These days,
the most widely accepted and commonly used way of accessing one’s deposited funds is
through the use of Automated Teller Machines (ATM).

However, technology has also paved the way for the proliferation of mechanisms
or dlevices that allow access to data relevant to bank customer’s account. Reports said that
hundreds of millions of pesos are lost by various bank customers to syndicates who
s e in “card-skimming” or the duplication of cards and acquiring of personal
identification numbers (PIN) of unsuspecting ATM cardholders. According to the Bangko
Sentral ng Pilipinas (BSP), they are leaving it to the discretion of the individual banking
institutions whether to refund the vietims of ATM fraud,

What is more alarming would be the rampancy of incidents wherein account
holders were brought to a nearby ATM and forced to withdraw money at gunpoint. Sadly
common victims are employees whose hard cared salaries are deposited by their
employers to their individual ATM accounts or students who are away from their families
and receive their allowances or tuition fees thru ATMs,

To provide relief to customers whose funds were withdrawn without their
knowledge by means of card-skimming and so as victims of hold-ups won't need to
gamble their safety, it is best iff all banking institutions would offer an insurance that
would cover the abovementioned circumstances. ‘This service is already being enjoyed by
millions of clients of the Philippine National Bank (PNB), the first and only bank in the
Philippines that offer this kind of insurance. Our banking institutions are required to
ensure not only the safety of the funds deposited, but also the safety of the persons of
their clients. As such, it is highly necessary to mandate all of them to offer said insurance
services to all of their clients.

In view of the urgency of this measure, passage of this bill is earnestly sought.

R-PRe

ROMAN T. ROMULO,


Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City

SIXTEENTH CONGRESS
Second Regular Session

5036

HOUSE BILL NO.

Introduced by HON. ROMAN T, ROMULO,

AN ACT MANDATING ALL BANKING INSTITUTIONS TO
OFFER AN AUTOMATED TELLER MACHINE THEFT
INSURANCE TO ALL CLIENTS, PROHIBI1 i

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 “The ATM Theft
Insurance Act of 2014”

SECTION 2. Declaration of Policy. ~ The State recognizes the recent
advances in modem technology and the widespread use of Automated Teller
Machines (ATM) in the field of banking. Towards this end, the State shall guarantee
the protection of ATM users against all forms of theft and create a mechanism for the
refund of money withdrawn without the knowledge or against the will of account
holders.

SECTION 3. Definition of Terms. — For purposes of this Act, the following
terms shall me:

(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 checking one’s balance,
withdrawing or transferring funds during or even after banking hours

(b) BANKING INSTITUTION shall mean a network of commercial, savings,
and specialized banks that provide financial services. including accepting
deposits and providing loans and credit, money transmission and
investment facilities.

(c) CARD-SKIMMING shall mean any electronic method of reading,
capturing or stealing a cardholder's information over the Automated Teller
Machine.



SECTION 4. ATM Theft Insurance Policy — All banking institutions are
required to offer, among its other services, an insurance policy that would guaranty
customers a replacement of their money deposited that was withdrawn without their
knowledge or against their will through means such as but not limited tocard-
skimming, robbery, theft, employment of coercion, intimidation, duress and other
threats of violence upon the person of the bank customer or any person whose
possession of the ATM card is duly authorized by the bank customer oF owner
thereof.

SECTION 5. One Policy Per ATM Account ~ Enrollment of an ATM Theft
Insurance Policy shall solely acerue for the benefit of one ATM account to which the
same is enrolled. This is without prejudice to the right of clients with multiple ATM
account to obtain separate policies corresponding to all their other accounts,

SECTION. 6. Maximum Allowable Premium for ATM Theft Insurance ~ Every
banking institution is allowed to set the monthly premium to be paid by its clients
who wish to avail of their ATM Theft Insurance Policy which shall in no case exceed
‘Twenty Pesos (Php20.00) per month or Two Hundred Forty Pesos (Php240.00) per
annum,

SECTION 7. Maximum Amount of Claims per Customer in Case of Skimming,
Theft and other Similar Means- Every client who avails of the ATM Theft Insurance
Policy of their banking institution/s shall be entitled to claim the amount withdrawn
through card-skimming, theft or other means without the knowledge, presence and
consent of the bank customer which shall in no case exceed Fifty Thousand Pesos
(Php50,000.00). This is without prejudice to the right of banking institutions to offer
an ATM Theft Insurance policy that would fully cover any amount over and above
Fifty Thousand Pesos (Php50,000.00) that is lost through the abovementioned
cirumstances and means.

SECTION 8. Maximum Amount of Claims per Customer in Cases of Robhery
or Employment of Coercion, Intimidation, Duress and Other Threats of Violence
Upon the Person of the Card Holder ~ Every client who avails of the ATM Theft
Insurance Policy of their banking institution/s shall be entitled to claim the amount
withdrawn by means of robbery or employment of coercion, intimidation, duressand
other threats of violence upon the person of the card holder which shall in no case
exceed the maximum allowable amount that can be withdrawn in a single day
imposed by the banking institution for a maximum of three (3) incidents per year.

SECTION 9. Minimum Requirements for Filing of Claims ~ Bank customers
are entitled to the proceeds of their ATM Thefi Insurance Policy after submitting the
following requirements to the branch where they opened the account subject of the
loss:

(a) Letter request addressed to the branch manager;
(b) Copy of the ATM Theft Insurance Polis



(©) Notarized affidavit of the account holder or the duly authorized card
holder at the time of the loss narrating the circumstances surrounding
the incident;

(d) Police report;

(©) Any other reasonable requiremenv/s as may be imposed by the banking
institution appearing on the policy itself which shall in no case be used
to delay the recovery of the amount or defeat the purpose of this Act.

CTION 10. Period for Filing Claims ~ Banking institutions may include in
their insurance policies a prescriptive period for filing claims against them which
shall in no case be less than seven (7) working days from the discovery of the loss of
the deposited funds my means of skimming, theft and other similar cases or from the
date the coercion, intimidation, duress and other threats of violence against the person
of the card owner or authorized card holder has ceased.

In no case shall the abovementioned prescriptive period bar the filing of
claims as well as the recovery of the amount lost should the lacking requirements fall
under paragraph (5) of the preceding section and are within the control of or the
release of which is subject to the discretion of the banking institution.

SECTION 11. Period for Recovery of the Amount/s Subject of the Claim —
Upon submission of the requirements provided for in the preceding section, the
banking institution shall be given fifteen (15) working days to process, review the
veracity of the claim/s and the compliance with the requirements and restore the
amount claimed in the customer’s account.

SECTION 12. Failure to Enroll ATM Accounts ~ Failure of bank customers to
secure an ATM Theft Insurance Policy for their accounts shall in no way prejudice his
or her right to report and request for recovery of the lost amount/s subject to
governing policies of the banking institution, submission of sufficient proof and the
approval of which is left to its sound discretion.

SECTION 13. Penalties for Fraudulent Claims ~ Any person who is proven to
have willfully and fraudulently filed a claim, together with his co-conspirators! and
accomplice/s shall be punished with a fine of not less than Fifly Thousand Pesos
(Php50,000.00) but not exceeding Three Hundred Thousand Pesos (Php300,000,00)
and an imprisonment of not less than six (6) years but not more than twelve (12)
years.

SECTION 14. Liability under the Revised Penal Code and other laws
Prosecution under this Act shall be without prejudice to any liability for violation of
any provision of the Revised Penal Code or any other law.

SECTION 15. Separability Clause ~ If any separable provision of this Act be
declared unconstitutional, the remaining provisions shall continue to be in force.

SECTION 16. Repeating Clause — Any law, presidential decree or issuance,
executive order, letter of instruction, administrative order, rule or regulation contrary


to, or inconsistent with the provisions of this Act is hereby repealed, modified or
amended accordingly.

SECTION 17. Effectivity Clause — This Act shall take effect fifteen (15) days
after its complete publication in at least two (2) newspapers of general circulation.

Approved,