Enter Your Pin or Swipe your Card: A New Law Providing Stricter Use of Access Devices

On August 28, 2019, the President signed into law Republic Act No. 11449 (RA 11449) which provides for additional prohibitions to and increasing penalties for violations of the “Access Devices Regulation Act of 1998” or Republic Act No. 8484 (RA 8484).

            RA 8484 is a law enacted to regulate the issuance and use of access devices and prohibit fraudulent acts committed in relation to such devices. This is in view of the State’s recognition of recent advances in technology and the widespread use of access devices in commercial transactions. As more people adapt to the said technological advances, the more the State’s imperative duty to protect the rights and define the liabilities of parties in such commercial transactions by regulating the issuance and use of access devices arises (Section 2, RA 8484 and Section 1, RA 11449).

Republic Act 8484: Access Devices Regulation Act of 1998, as amended

            Access Devices are any card, plate, code, account number, electronic serial number, personal identification number, or other telecommunications service, equipment, or instrumental identifier, or other means of account access that can be used to obtain money, good, services, or any other thing of value or to initiate a transfer of funds (other than a transfer originated solely by paper instrument). The two (2) most common examples of this are, credit cards and debit cards.

            In relation to credit cards, we find it necessary to discuss one of the most common questions asked as far as said cards are concerned, it is, can a credit card holder be imprisoned for failure to pay debts owed in credit cards? The answer is in the negative. The mere failure to pay debts owed in credit cards is not a ground for a person to be imprisoned. In fact, under Section 20 of Article III (Bill of Rights) of the 1987 Constitution expressly provides that “no person shall be imprisoned for debts.” However, a different intention of the cardholder would result to different result. For instance, what if the credit card holder obtained money through the use thereof with intent to defraud or intent to gain money and flee thereafter? The answer will be different.

            Under Section 9 of RA 8484 in relation to Section 3 of RA 11449, obtaining money or anything of value through the use of an access device (such as credit card), with intent to defraud or with intent to gain and fleeing thereafter is a prohibited act punishable by imprisonment of at least 4 to 6 years, and a fine that is double that value of the fraudulently obtained credit. Furthermore, in relation to intent to defraud, 5 of RA 11449 provides that, if the cardholder who abandons or surreptitiously leaves the place of employment, business or residence stated in his application for credit card, without informing the credit card company of the place where he could actually be found, if at the time of such abandonment or surreptitious leaving, the outstanding and unpaid balance is past due for at least ninety (90) days and is more than P200,000.00, shall be prima facie presumed to have used his credit card with intent to defraud. Thus, to be clear, only if the credit cardholder used said device to gain money and to defraud the issuing bank will a penalty of imprisonment be meted out.

            As regards debit cards, it is defined by RA 11449 as “payment cards.” Payment Cards under Section 2 of RA 11449, refer to any card of whatever material or from including any kind of debit card, but not a credit card, issued by a bank or business entity that enables a customer to access an automated teller machine (ATM) in order to perform transactions such as deposits, cash withdrawals and obtaining account information. A payment card shall be considered as an access device.

            RA 8484 punishes several fraudulent tactics in relation to payments cards, and in light of its recent amendments, aside from increasing the penalties for its violation, new prohibited acts are introduced, these are:

1. Skimming, copying or counterfeiting any credit card, payment card or debit card, and obtaining any information therein with the intent of accessing the account and operating the same regardless whether there will be monetary loss/injury;

• Production or possession of any software component such as programs, application, or malware, or any hardware component such as skimming device or any electronic gadget or equipment that is used to perpetuate any of the foregoing acts;

• Accessing with or without authority, any application, online banking account, credit card account, ATM account, debit card account, in a fraudulent manner, regardless whether monetary loss will result thereafter;

• Hacking through unauthorized access into or interference in a computer system/ server, or information and communication system, or any access in order to corrupt, alter, steal, or destroy using a computer or other similar information and communication devices without the knowledge and consent of the owner of the computer or information and communication 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.

As the state acknowledges that the commission of a crime using access devices is a form of economic sabotage and a heinous crime and shall be punishable to the maximum level allowed by law (Section 1 of RA 11449), the new law provides that in relation to hacking of a system as well as skimming of at least fifty (50) debit or credit cards, and bank accounts, these are punishable by a term of life imprisonment and fines ranging from P1 million to P5 million.

In addition, possession of at least 10 counterfeit devices and the successful illegal access of an account is punishable with imprisonment ranging from 12 to 20 years and a fine of at least P500,000.

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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.

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