BSP Warns Against Auto Loans “Modus”
The Bangko Sentral ng Pilipinas (BSP) cautions the public against an increasingly prevalent modus employed by carnapping syndicates, following its memo for BSP-Supervised Financial Institutions (BSFIs) on organized crimes through auto loans issued on 26 August 2021.
Perpetrators of the Assume Balance/Pasalo Scheme, also known as the Pasalo-Benta Scheme, targets vulnerable car buyers hoping to save money on their car purchase and sellers who need to transfer their liabilities. Under this scheme, a syndicate member would buy a vehicle from a seller with an agreement to assume payments for the auto loan.
However, the syndicate member has no intention of paying the remaining amortizations and will sell/dispose of the vehicle to an end-buyer to gain profit using falsified documents, giving the end-buyer no rights over the vehicle. As a result, the original seller defaults on his/her auto loan and the car gets repossessed1 leaving the end-buyer with nothing.
The BSP Memorandum called on BSFIs to prevent these crimes by reinforcing the conduct of customer identification and verification procedures as part of the customer due diligence. It also explained other types of car-related illegal activities including the rent-tangay, rent-sangla, loan accommodator scheme, and labas-casa scheme.
The Philippine National Police also recently warned against syndicates that acquire high-end motor vehicles through auto loans under fictitious circumstances. These crimes are done through fabricated conduction stickers, plate numbers, identities, and falsified documents, such as identification cards and employment certificates, to successfully avail of auto loans. Carnapping Syndicates sometimes resort to identity theft by using an actual person’s name, address, and company profile, but with a different photo.
The BSP also advised BSFIs to strictly observe and strengthen the implementation of Anti-Money Laundering (AML) regulations on a) customer identification and verification procedures, b) ongoing monitoring of customers and their transactions, c) suspicious transaction reporting, and d) continuing AML training program including controls relating to partner/accredited car dealers. BSFIs are also reminded to file suspicious transaction reports, when warranted.