The History of Penalizing Credit Card Fraud in the Philippines

Penalizing Credit Card Fraud in the Philippines, History of - Nicolas and De Vega Law Offices Article Image

Republic Act No. 8484 (“RA 8484”) otherwise known as “AN ACT REGULATING THE ISSUANCE AND USE OF ACCESS DEVICES, PROHIBITING FRAUDULENT ACTS COMMITTED RELATIVE THERETO, PROVIDING PENALTIES AND FOR OTHER PURPOSES” punishes a person who uses an access device, particularly a credit card, without the authority of its owner.

RA 8484 was Originally Filed in Congress to Punish Credit Card Fraud

Tracing the history of RA 8484, it will be discerned that the law was actually enacted to protect the public from fraudulent credit card transactions. The legislative intention back then was to cover the illegal credit card activities that have become rampant, at the time the law was passed.

Salient portions of the legislative deliberations of House Bill No. 6951 (“HB 6591”), the precursor of RA 8484, are quoted below:

BUSINESS FOR THE DAY:

COMMITTEE REPORT NO. 1314

ON HOUSE BILL NO. 6951

Thereafter on motion of Rep. Albano, there being no objection, the Body considered on Second Reading House Bill No. 6951 as embodied in Committee Report No. 1314 and reported out the Committee on Banks and Financial Intermediaries.

Upon direction of the Chair, the Secretary General read the title of the Bill, to wit:

AN ACT PENALIZING CREDIT CARD FRAUD, PRESCRIBING PENALTIES THEREFOR AND FOR OTHER PURPOSES.”[1] [Emphasis and underscoring supplied.]

From a reading of the quoted citation, it must be stressed that the legislature intended that RA 8484 is the law that will penalize credit card fraud. In the same vein, the legislative intention is apparent from the remarks of the sponsor of HB 6591, to wit:

SPONSORSHIP REMARKS OF REP. CHAVES

Initially, Rep. Chaves adverted to the global use of credit cards in almost all commercial dealings, including bank transactions. He however commented on the growing incidents involving the fraudulent use of credit cards which seriously affect trade and commerce. He disclosed that there are instances when fake credit cards are used to buy goods and services from commercial establishments or when some unscrupulous people forge the signatures of cardholders. He cited for example the recent arrest of a group of foreigners who had with them fake or forged credit cards. He noted the absence of a law specifically dealing with these offenses.

He understood the need for a special law to curb the proliferation of anomalies in the credit card system. He said that House Bill No. 6951 is timely as it seeks to address the following needs:

  1. define the acts constituting credit card fraud;
  2. prescribe the penalty for each type of violation and define the persons liable;
  3. prescribe the rules regarding presumptions of intent to commit credit card fraud; and
  4. guarantee that the liability under the Revised Penal Code is not prejudiced; and provide reporting requirements.”[2] [Emphasis and underscoring supplied.]

Therefore, the main focus of HB 6951 is to curb the proliferation of fraudulent credit card transactions.

The Congressional Interpellations over RA 8484 identified the law as being filed to Punish Credit Card Fraud

In the same vein, the interpellations made during the legislative deliberation of HB 6951 is enlightening. It clarifies the scope of RA 8484, and particularizes the coverage of the law to credit cards. The pertinent portions of the deliberations are quoted below, to wit:

INTERPELLATION OF REP. FUENTEBELLA

At the outset, Rep. Arnulfo P. Fuentebella observe (sic) that the measure is timely specially (sic) with the advent of modern communications technology and the rampant commission of electronic fraud. Thereafter, he inquired whether the measure refers to credit cards. Rep. Chaves replied in the affirmative.

On whether the measure is intended to cover other schemes for the prevention of electronic or modern fraud committed with the use of credit cards and the easy availment of credit.

Rep. Chaves said that at present, the Committee has not yet thought of other schemes of fraud that could be committed aside of what is encompassed by the Bill.

Rep. Fuentebella stressed that in the United States and other modern countries in Europe, credits and loans can be availed of through computers.

Agreeing thereto, Rep. Chaves clarified that he has read about crimes being committed through the use of computers, however, the measure deals specifically with fraud committed through the use of credit cards.

xxx

INTERPELLATION OF REP. TINGA

Noting that the Explanatory Note of the Bill states that the use of counterfeit credit cards is covered and penalized by the provision of the Revised Penal Code on estafa, he inquired on the reason for coming out with such a special legislation. If the particular provision in the Revised Penal Code is deficient, he asked if an amendment of Article 315 would not be more appropriate course of action.

Rep. Chaves averred that there are certain acts that are not punishable under the Revised Penal Code, like the mere possession of counterfeit or unauthorized credit cards.

Rep. Tinga asked if Section 4(h) of the measure on credit card fraud is also penalized under the Revised Penal Code and constitutes estafa or embezzlement. If the act constitutes estafa, he inquired on the rationale for seeking to penalize the same offense.

The proposed special law, Rep. Chaves claimed, seeks to be as comprehensive as possible in penalizing fraudulent acts through the use of credit cards.

Rep. Tinga emphasized that comprehensiveness does not mean redundancy. If the act is already penalized under existing statute, he argued that there is no point in penalizing the same act in another statute.

While the Bill may seem redundant, Rep. Chaves asserted that it is all-encompassing so that any possible crime committed with the use of credit cards will be covered by this special law.

In this regard, Rep. Tinga said that the Committee should make a study of which offense is easier to prosecute, the offense of estafa or the proposed special prohibition contained in the measure.

Rep. Chaves emphasized that the Committee feels that it will be easier to prosecute under the special law, as it consolidates penalties on fraudulent use of credit cards.”[3] [Emphasis and underscoring supplied.]

Congress Originally Initially Intended to Punish forms of Credit Card Fraud under RA 8484

Very obvious is the fact that the legislators clearly intended to particularize the scope of RA 8484 to credit cards.  During the time RA 8484 was passed, the legislature has not yet come up with the idea of criminalizing other frauds committed through the use of other electronic means. The main objective of the legislature, back then, as seen from the congressional deliberations, was to consolidate the laws on crimes involving credit cards. Hence, to a significant degree, the law should be read to be covering only credits cards and nothing else.

On its third and final reading, the House of Representatives approved HB 6951, which later on became RA 8484. Looking at the legislative records, it can be seen that the bill from which RA 8484 came from was intended to be a deterrent of credit card fraud only. The legislative intent is evident when HB 6951 was passed on its third and final reading with the title “AN ACT PENALIZING CREDIT CARD FRAUD, PRESCRIBING PENALTIES THEREFOR AND FOR OTHER PURPOSES.”, to wit:

APPROVAL ON THIRD READING ON HOUSE BILL NO. 6951

On motion of Rep. Albano, there being no objection, the Body proceeded to the approval on Third Reading of House Bill No. 6951, printed copies of which were distributed to the Members on January 22, 1998, pursuant to Section 83, Rule XIV of the Rules of the House.

Upon direction of the Chair, the Secretary General read the title of the Bill, to wit:

“AN ACT PENALIZING CREDIT CARD FRAUD, PRESCRIBING PENALTIES THEREFOR AND FOR OTHER PURPOSES.[4] [Emphasis and underscoring supplied.]

RA 8484, as passed, punishes Access Devices Fraud, which also includes Credit Card Fraud

Upon its passing into law, RA 8484’s coverage was expanded. No longer was it limited to credit cards or credit card fraud. On the contrary, the law made use of the term “access devices”, which is an even larger genera or class that includes credit cards. As a matter of act, credit cards are considered as access device under RA 8484. Specifically, Section 3 of RA 8484 provides, to wit:

Section 3. Definition of terms. – For purposes of this Act, the terms:

(a) Access Device – means 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) …

(f) Credit Card – means any card, plate, coupon book, or other credit device existing for the purpose of obtaining money, goods, property, labor or services or any thing of value on credit;” [Emphasis and underscoring supplied]

Thus, the unauthorized use of any access device, which includes a credit card, is prohibited under Section 9 of the same Act:

Section 9. Prohibited Acts. – The following acts shall constitute access device fraud and are hereby declared to be unlawful:

xxx

j) obtaining money or anything of value through the use of an access device, with intent to defraud or with intent to gain and fleeing thereafter;

Section 14. Presumption and prima facie evidence of intent to defraud. – The mere possession, control or custody of:

(a) an access device, without permission of the owner or without any lawful authority;” [Emphasis and underscoring supplied.]

Thus, where a person uses and obtains money by swiping and charging against a credit card belonging to another, and without the consent of the credit card owner, a crime is committed. Stated otherwise, the use of a credit card for unauthorized transactions gives rise to a violation under Section 9(j) of RA 8484.

 

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[1] House Bill No. 6951 Deliberations, 15 December 1997.

[2] House Bill No. 6951 Deliberations, 15 December 1997.

[3] House Bill No. 6951 Deliberations, 15 December 1997.

[4] House Bill No. 6951 Deliberations, 27 January 1998.

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