AFASA: How the Philippines Tackled Its Scammer Crisis

The Sumsuber sat down with Nido Molejon, Head of Pre-Sales for Cybersecurity Architecture and Engineering at Nexus Technologies, to unpack the Philippines’ Anti-Financial Account Scamming Act (AFASA). From the human impacts of fraud to new crime-fighting tech, Nido shares firsthand insights into how AFASA is revolutionizing the country’s fraud prevention landscape.  

Why the Philippines needed AFASA

THE SUMSUBER: Thanks for taking the time to speak with us, Nido. There’s been a lot of talk about AFASA recently. So, just what is AFASA and why do we need it?

NIDO MOLEJON: The Anti-Financial Account Scamming Act, or AFASA, is the Philippines’ legal answer to a surge in financial cybercrime. It’s designed to keep consumers safe and safeguard the integrity of the financial system. 

It was badly needed to tackle the increasing risks and threats facing the public. With AFASA in place, BSP—the country’s central bank—now has real power to investigate violations, supported by law enforcement agencies.

I think AFASA is a game-changer. It’s going to boost consumer protections, improve trust in financial institutions, and reduce cybercrime by making things much harder for criminals.

THE SUMSUBER: You mention consumers are facing increasing risks and threats. Why is that? 

NIDO MOLEJON: With rapid digitalization during the pandemic, a lot of businesses, like those in retail, started to adopt new technologies to keep their businesses afloat and eventually expand. One of the technologies they adopted was digital payments, which has since flourished in the country. 

But these retail businesses lacked awareness of online fraud and were an easy target for cybercriminals. As the law was unfit to help them, fraudsters were free to keep exploiting vulnerable retailers.

THE SUMSUBER: So, the Philippines lacked a sufficient legal framework to tackle these criminals prior to AFASA?

NIDO MOLEJON: Before AFASA, cybercriminal laws in the Philippines were mainly for cybercrimes like cyberlibel, the unauthorized hacking of private resources, and other more common crimes. Due to the Philippines’ focus on strong bank secrecy laws, it can be difficult to gather enough evidence to allow law enforcement to tackle scammers. 

The main difference from the laws we had earlier is that AFASA gives our central bank (BSP) the power to investigate financial fraud together with law enforcement agencies. AFASA means financial institutions are mandated to implement fraud management systems. It also brings in severe penalties and custodial sentences for criminals.

If done correctly, this will improve the trust other nations and international organizations have in dealing with Philippine financial institutes. If not done correctly, international organizations might take longer to deal with local organizations. This will definitely affect things like prices of daily goods.

THE SUMSUBER: You mention more severe penalties for criminals. What cases have you seen where you feel AFASA would have helped?

NIDO MOLEJON: AFASA could have helped victims in the past caught up in scams. There have been many reports on teachers who fell victim to online scams, like phishing attacks, and they had their hard-earned money stolen. These could range from PHP900 – 200,000 (USD16 – 3,600) in just one transaction.

Suggested read: AML/KYC in the Philippines: Complete Guide 2025

Tackling fraud: Easier said than done?

THE SUMSUBER: You spoke earlier of how rapidly the Philippines changed after the pandemic, making an act like AFASA necessary. How is AFASA enforced in practice in this rapidly developing digital landscape?

NIDO MOLEJON: AFASA is enforced through a mix of regulatory measures, legal frameworks, and institutional responsibilities. Financial institutes are expected to have robust security measures and mature fraud detection systems. Everyone needs to be aware of the implications because of the possibility of facing penalties, including getting sent to prison.

THE SUMSUBER: A recent report indicates that up to 5% of the population of the Philippines may be involved in money mule networks. What challenges do you foresee in tackling money mules?

NIDO MOLEJON: At this point in time, I can foresee a challenge in identifying the people who are actually involved in illegal activities like money muling. The Philippines still lacks widespread awareness about these things, especially in more rural areas of the country. These areas are the most vulnerable since they have very little knowledge how money mules operate.

THE SUMSUBER: Considering that, are there concerns about the law unfairly penalizing unaware account holders who may be victims themselves?

NIDO MOLEJON: This is a big concern, especially when there are new methods of committing financial fraud. An example of this is someone posting an online job pretending to be from a legitimate company. Victims apply to this job and are then asked to create digital accounts, like e-wallets, to get paid or they may be made to send a payment to fake employees on behalf of the company.

My advice to ordinary account holders to avoid unintentionally breaking the law and getting accused of being a money mule is to be careful dealing with people who make promises about sums of money. Do your research on them first and if something still feels strange, say no. 

What AFASA looks like in action

THE SUMSUBER: Let’s move on to how AFASA works in practice. What new obligations do financial institutions now have under AFASA and what’s the best way of complying with these changes?

NIDO MOLEJON: Aside from monitoring unusual transactions, financial institutions are obligated to quickly respond to cases they need to investigate. They also have to keep relevant records and cooperate with law enforcement and other authorities.

I would say implementing an automated and real-time fraud monitoring and detection system is the best way of staying compliant with AFASA. This way, financial institutions can get a heads-up in monitoring violations and quickly report anything suspicious to regulatory bodies.

THE SUMSUBER: So, why is manual screening alone insufficient for fraud prevention?

NIDO MOLEJON: Nowadays, performing manual screening is challenging because of the vast amounts of information analysts need to gather. Doing this repeatedly also leads to challenges in accuracy when reviewing the information. Manual screening can also hinder legitimate transactions, which can damage business. Automation is essential because all these processes can take financial institutions months.

THE SUMSUBER: What does a resilient fraud management system look like?

NIDO MOLEJON: As I see it, a resilient fraud management system should be able to use insights from past incidents of fraud to strengthen defenses. This will create a more trustworthy, secure, and adaptive environment to counter future fraud. 

Financial institutions must also keep reviewing and improving their processes to stay ahead of the curve. Effectively adopting new technologies is a priority in the fight against future financial fraud.

Suggested read: Fraud Trends for 2025: From AI-Driven Scams to Identity Theft and Fraud Democratization

Fighting criminals with tech and legal innovation

THE SUMSUBER: You mentioned future financial fraud. In a context where fraud in the Philippines has spiked in recent years, what scams should financial institutions be particularly aware of?

NIDO MOLEJON: Aside from phishing and impersonation, financial institutes also need to be conscious of elder exploitation scams. They have to stay vigilant and protect particularly vulnerable people, like the elderly, from becoming victims.

THE SUMSUBER: What technologies are on the horizon to further combat fraud?

NIDO MOLEJON: There are a lot of technologies out there to choose from, but the most significant is undoubtedly AI. We can use it to improve accuracy and also combat AI-generated information itself. AI improves behavioral analytics as well, and this helps analysts do their work a lot faster.

THE SUMSUBER: Innovation in tech and legal frameworks is obviously important to stay effective in fighting fraud. How does AFASA compare to anti-fraud laws in other countries, and do you think this legislation could serve as a model for other nations?

NIDO MOLEJON: I would say that AFASA is more mature and uses modern international standards to fight financial fraud.

Personally, yes, I do think AFASA could serve as a legislative model, especially in the APAC region. I think effective anti-fraud legislation is particularly necessary here when there is so much human trafficking in the region on a daily basis. 

If other nations were to implement legislation similar to AFASA, or do even better than that, this could really help reduce human trafficking. Victims could have more protections and also act more cautious when dealing with financial scams.

THE SUMSUBER: Thanks again for all your insights, Nido. It really drives home the human significance of good anti-fraud tech and legislation. Just one last question before you go: where do you see the future of fraud prevention tech and legislation going over the next five to ten years?

NIDO MOLEJON:  I expect fraud prevention technology to be more resilient, especially in incorporating past cases of fraud to help systems independently learn and mature.

Based on where we are now, I expect there to be legislation to help incorporate the use of national ID for transactions at financial institutions. I also think legislation will focus on how to improve our processes so we can address financial fraud much faster.