House Okays Measure Declaring Credit-Card Fraud as Heinous Crime

5. February 2018.

The House of Representatives on Monday approved on third and final reading a measure declaring hacking of bank systems and stealing 50 or more ATM or credit-card details as economic sabotage.

Voting 224-0, lawmakers passed House Bill (HB) 6710, which aims to strengthen public trust on the electronic financial and trade and sectors. HB 6710 will be transmitted to the Senate for its own deliberations.

The bill seeks to further avert losses in the financial and trade sector due to illegal use of electronic access devices. The measure is the unified version of separate bills filed by House Committee on Banks and Financial Intermediaries Chairman Ben P. Evardone of the Lone District of Eastern Samar and Rep. Ramon H. Durano VI of the Fifth District of Cebu.

HB 6710 refers to hacking as the unauthorized access into or interference in a computer system/service or information and communications system; or any access in order to corrupt, alter, steal or destroy using a computer or other similar information and communications devices, without the knowledge and consent of the owner of the computer or information and communications system, including the introduction of computer viruses and the like, resulting in the corruption, destruction, alteration, theft or loss of electronic, data messages or electronic documents.

Under the bill, unauthorized access through hacking or planting of a virus in a bank’s computer system resulting in corruption or theft of data is defined as economic sabotage, a non-bailable criminal offense carrying penalties of life in jail and fines of P1 million to P5 million.

It added the same penalties are to be imposed on card skimming/data theft that will affect 50 or more ATM-based accounts, credit cards or online bank accounts.

The bill said mere possession of a card skimming device or any similar gadget used for unauthorized harvest of account data—even if no actual theft takes place—is also punishable with imprisonment of six to 12 years and fines ranging from P300,000 to P500,000.

It will also increase security for OFW remittances totaling $33 billion each year, as well as the growing e-commerce/online-shopping sector, which accounted for P60 billion in revenues last year.

The bill acknowledges the advances in information technology on access devices have been exploited by criminals and criminal syndicates in perpetrating fraudulent activities that ultimately undermine the trust of the public in the banking industry.

Due to this deleterious effect on the economy, the bill indicated that the state would declare the commission of a crime using access devices as a form of economic sabotage and heinous crime and shall be punishable to the maximum level allowed by law. House Committee on Banks and Financial Intermediaries Chairman Ben Evardone of Eastern Samar said the bill will protect holders of more than 80 million ATM/credit cards currently in circulation.

According to Evardone, there are 76 million debit and prepaid cards currently in circulation, in addition to 8.5 million credit cards. He said losses from ATM fraud have surged alarmingly, from P175 million in 2012 to more than P600 million in 2016—

a 250-percent increase in just four years.

“Add to this the reported P500 million stolen through fraudulent credit-card transactions in 2016 alone and one starts to get the scary picture. This has to stop,” Evardone said.

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