BSP Circular 1215: Temporary Holding of Disputed Funds and Coordinated Verification (AFASA)

BSP Circular No. 1215 (Series of 2025) implements the Anti-Financial Account Scamming Act (AFASA) by introducing rules for temporary holding of disputed funds and a coordinated verification process across BSIs, ACH participants, and CSOs. It adds new MORB/MORNBFI/MORPS sections, detailed appendices, and reporting requirements.

Key Changes

New Section 1006/1006-Q/1105 created for temporary holding of disputed funds and coordinated verification.
Disputed funds definition includes funds traced through transaction chains, even if partially moved across institutions.
Initial holding up to 5 calendar days; extended holding up to 25 calendar days (total 30 days), extendable only by court order.
Triggers include complaints, FMS findings, and inter‑BSI holding requests.
Coordinated verification required across OFIs, RFIs, subsequent RFIs, ACH participants, and CSOs.
Industry protocol mandated and subject to BSP review.
Non-applicability of secrecy laws during coordinated verification (with safeguards).
Reporting duties: monthly THF report and annual notarized certification.

Who Is Affected

Banks, non-bank financial institutions, and payment service providers supervised by BSP.
ACH participants and clearing switch operators (CSOs).
Compliance, fraud, and consumer protection teams handling disputed transactions.

Effective Date & Transition

The circular takes effect 15 calendar days after publication in the Official Gazette or a newspaper of general circulation.

Transitory provisions

1 year to develop and fully adopt the industry protocol.
6 months to adopt interim mechanisms for holding and verification.
Reporting guidelines for THF take effect 1 year from the circular’s effectivity, with first report due on the 15th day of the second month after guidelines take effect.

Compliance Actions Checklist

Implement FCPAM workflows for complaint‑initiated holds with 24/7 reporting channels.
Enable automated tracing and time‑logging for disputed transaction chains.
Define initial and extended hold procedures and communications to source/beneficiary account owners.
Align FMS alerts to trigger holding and coordinated verification steps.
Prepare inter‑BSI response protocols for initial and extended holding requests.
Draft/align the industry protocol with BSP minimum requirements and submit for review.
Set up reporting for THF monthly reports and annual notarized certification.

Reporting Highlights

Monthly Report on Temporarily Held Funds (THF)

Due every 15th of the month, covering the prior reference month.
Submission via Appendix 162/Q‑106/1105‑3 with BSP-prescribed email channel.

Annual Notarized Certification

Due within 30 calendar days from year-end.
Category B report under MORB/MORNBFI/MORPS reporting schedules.

FAQs

What transactions are covered? Electronic fund transfers between financial accounts. Erroneous transactions and most credit card transactions are excluded, except when credit cards are used for EFTs via ACH.

Can funds be released early? Yes. If the beneficiary account owner substantiates legitimacy, the BSI must lift the hold immediately.

Do secrecy of deposits and data privacy laws apply? They do not apply during coordinated verification, but information must be protected and used only within scope.