Understanding the Anti-Financial Account Scamming Act (AFASA).

Protecting Financial Accounts in the Digital Age

With the rise of online banking, e-wallets, and digital payments, financial scams have become increasingly sophisticated. Recognizing this threat, the Philippine government enacted Republic Act No. 12010, also known as the Anti-Financial Account Scamming Act (AFASA), signed into law on July 20, 2024. This landmark legislation is designed to protect account holders, strengthen safeguards within financial institutions, and hold scammers accountable.

Key Offenses Defined by AFASA

AFASA clearly defines what constitutes financial account scamming. The major prohibited acts are:

• Money Muling – Using or lending financial accounts for suspicious transactions, opening accounts under fake names, or selling/renting accounts. Even recruiting others for such purposes is punishable.

• Social Engineering Schemes – Using deception to steal sensitive information like passwords or one-time PINs (e.g., phishing emails, fake calls, or texts).

• Economic Sabotage – Large-scale or organized scams involving multiple perpetrators, multiple victims, mass phishing, or links to human trafficking. These are considered the most serious cases.

• Other Offenses – Aiding, abetting, or attempting scams, opening fake accounts, selling accounts, or filing false reports to freeze funds.

In practice: Even lending your account to someone, or being careless with your personal information, could result in liability under AFASA. The law is strict to prevent ordinary people from becoming unwitting tools of scammers.

Penalties and Liabilities

The law imposes heavy penalties depending on the offense:

• Money Muling: 6–8 years imprisonment and ₱100,000–₱500,000 fine. Offending accounts will also be closed and forfeited.

• Social Engineering: 10–12 years imprisonment and ₱500,000–₱1,000,000 fine. If the victim is a senior citizen: 12–14 years and up to ₱2,000,000 fine.

• Economic Sabotage: Life imprisonment and ₱1,000,000–₱5,000,000 fine.

• Other Offenses (aiding, attempts, fake accounts): 4–6 years imprisonment and ₱100,000–₱200,000 fine.

• Malicious Reporting: 1–5 years imprisonment and ₱50,000–₱200,000 fine.

• Corporate Liability: Companies can be fined up to ₱10 million, in addition to the criminal liability of responsible officers.

• Public Officials: Those convicted are permanently barred from public office.

Conviction also carries civil liability: offenders may be ordered to pay restitution to victims and forfeit assets used in scams.

Duties of Financial Institutions

Banks, e-wallet providers, and other financial institutions supervised by the BSP must:

• Implement multi-factor authentication and fraud monitoring systems.

• Strengthen KYC (Know Your Customer) and verification procedures.

• Freeze suspicious funds for up to 30 days while investigating.

• Cooperate with other institutions and law enforcement in scam investigations.

• Reimburse victims if they failed to exercise due diligence in protecting accounts.

Institutions that comply with BSP standards gain protection from liability if scams occur despite proper safeguards.

Best Practices for Clients

For Individuals

• Never lend, sell, or rent your bank account or e-wallet.

• Protect sensitive information — never share passwords, PINs, or OTPs.

• Be skeptical of unsolicited calls, texts, or emails posing as banks.

• Report lost IDs, compromised accounts, or suspicious activity immediately.

• Avoid “easy money” offers online, as these are often recruitment for money mule schemes.

For Companies

• Strengthen compliance and KYC processes to prevent fake accounts.

• Use multi-factor authentication and fraud monitoring.

• Respond quickly to disputed transactions and coordinate with other institutions.

• Educate employees and customers about scams and how to avoid them.

• Regularly audit IT security and fraud prevention measures.

Conclusion

The Anti-Financial Account Scamming Act (AFASA) is a comprehensive safeguard against the growing threat of digital financial scams. It punishes scammers and their accomplices with heavy penalties, holds financial institutions accountable for lapses, and empowers victims with stronger protections.

For individuals, this means being vigilant and protecting your financial identity. For companies, it means investing in compliance and anti-fraud measures. Together, these efforts create a safer financial ecosystem and build trust in the digital economy.