One Click Away: Understanding Online Scams and Their Legal Consequences

The digital landscape has made everyday transactions more convenient. Banking services can now be accessed online, while consumers can purchase goods and services without leaving their homes. With the growing number of shopping applications, online marketplaces, and digital payment platforms, however, opportunities for fraudsters to target consumers have also increased. Online fraud is not limited to purchases from fraudulent sellers. Scammers also send deceptive messages posing as banks, financial institutions, or legitimate businesses to trick consumers into disclosing personal and financial information.

According to TransUnion, the Philippines’ digital fraud rate stood at 4.1 percent in 2025, above the global rate of 3.8 percent. The Philippines’ digital fraud rate has been above the global rate for six consecutive years. Moreover, digital fraudsters targeted 72 percent of surveyed Filipino consumers through online platforms, email, phone calls, or text messages between August and December 2025, also higher than the global average of 53 percent. 38 percent said they lost money to digital fraud, although the median reported loss in the Philippines at around ₱50,000 is below the global median of about ₱98,000. These figures show that online fraud is a significant concern for Filipino consumers.

Republic Act No. 12010, also known as the Anti-Financial Account Scamming Act (AFASA), addresses online scams. Section 4(b)(2) of AFASA prohibits social engineering schemes, which are committed when a person obtains sensitive identifying information of another, through deception or fraud, resulting in unauthorized access and control over the other’s financial account. This may be committed by using electronic communications to obtain the other’s sensitive identifying information.

Based on this provision, the prohibited acts would usually include sending text or online messages purporting to be someone they are not, or for a non-existing or different purpose, to gather and solicit a person’s sensitive identifying information, which is information that can be used to access a person’s financial accounts such as usernames, passwords, bank account details, credit card, and e-wallet information, among other electronic credentials, and other confidential and personal information [Section 3(i)]. A financial account is an account used to avail of products or services offered by institutions, such as an interest or non-interest-bearing deposit, trust, investment, or credit card account, other transaction account maintained with a bank, non-bank, or financial institution, e-wallet, and any other account used to avail of financial products or services defined under Section 3(c) of Republic Act No. 11765 or the Financial Products and Services Consumer Protection Act [Section 3(d)]. Institutions refer to banks, non-banks, other financial institutions, payments and financial services providers under the jurisdiction of the Bangko Sentral ng Pilipinas [Section 3(f)].

Section 4(a) of AFASA prohibits the use of a financial account for the purpose of obtaining, receiving, depositing, transferring, or withdrawing proceeds that are known to be derived from social engineering schemes, and these are called money muling activities.

The penalty for persons found guilty of a social engineering scheme is imprisonment of not less than 10 years but not more than 12 years, or a fine of at least ₱500,000.00 but not exceeding ₱1,000,000.00, or both, at the discretion of the court. If the target or victim is a senior citizen at the time the offense was committed, the penalty is not less than 12 years but not more than 14 years of imprisonment, or a fine of at least ₱1,000,000.00 but not exceeding ₱2,000,000.00, or both, at the discretion of the court [Section 16(b) of AFASA].

The penalty for persons found guilty of money muling activities is imprisonment of not less than 6 years but not more than 8 years, or a fine of at least ₱100,000.00 but not exceeding ₱500,000.00, or both, at the discretion of the court. In specific instances, the court may also order the closure of the financial account involved in the transaction and forfeiture [Section 16(a) of AFASA].

These provisions show how the law addresses the rampant issues of online financial fraud. While the law provides penalties for offenders, consumers must still be diligent in recognizing suspicious messages, transactions, and requests for financial information. Digital fraud remains to be a threat to consumers daily. As discerning consumers, we should not send private or financial information to unauthorized persons or institutions, and we should ensure that the online stores and sellers we want to buy from are legitimate and reliable before providing private or financial information and proceeding with the transaction.

Disclaimer: This is an article on general legal principles and not meant to be legal advice to the public or to any specific individual or groups of individuals. Anything written above may vary depending on specific facts or circumstances. Furthermore, no attorney-client relationship is established by reason of the publication of this article.