Parañaque OKs ordinance vs credit card fraud

MANILA, Philippines — To address the rampant leaking and selling of private information to cybercriminals, the Parañaque City council has passed an ordinance requiring visibility of card terminals or point-of-sale (POS) systems to consumers during payment.

Effective immediately, the ordinance requires retail and service providers in the city to make use of portable POS systems and proceed with their transactions in plain sight of the customer.

The POS system refers to advanced cash registers which use payment terminals, touch screens or other software options. It uses internet and different protocols and can be external portable payment card readers.

Councilor Pablo Olivarez II, principal author of the ordinance, said that in case the merchant has no portable or external terminal or POS system, their card readers must be easily seen during transactions and should not be obstructed.

Olivarez said that taking credit and identification cards from customers for purposes of card payments, if not in plain sight, is also prohibited under Section 2 of the ordinance.

He said most of the complaints he received from victims of credit and debit card scams claimed that it mostly occurred in local gas stations wherein scammers work with the cashier using skimming devices to victimize patrons.

Credit card skimming involves attaching an illegal device that copies and stores consumer credit card information to retail devices such as ATMs, fuel dispensers and POS systems.

Credit card skimmers can come in different forms, he said. Fuel pump and restaurant establishment skimmers are usually attached to the internal wiring of the machine and aren’t visible to the customer, said Olivarez, the eldest son of incumbent District 1 Rep. Edwin Olivarez.

Section 4 of the ordinance states that retail and service providers shall be given one year or until the renewal of their business permits to acquire and update their POS systems.

In the meantime, all transactions shall be in plain sight of the customer.

Complaints may be filed before the metropolitan trial court and consumer welfare office.

Merchants who violate the ordinance will be fined P3,000 for the first offense and P4,000 and P5,000 for the second and third offense, respectively. The city’s business permit and licensing office is designated as the implementing department.