Bill enshrines consumer protections against criminal financial schemes

Deputy Prime Minister and Minister of Finance Peter Turnquest yesterday tabled a critical bill that enshrines protections for consumers and investors, while criminalizing certain financial schemes.

The Financial and Corporate Service Providers Bill, 2020 modernizes current laws by establishing a full regulatory, 

internationally compliant framework under the authority of the Securities Commission of The Bahamas.

For the first time, the bill defines certain criminal financial schemes, making The Bahamas one of the leading jurisdictions to introduce legislation to expressly criminalize this type of activity, Turnquest said.

“These may take the form of pyramid schemes, Ponzi schemes and advance-fee schemes, among others and many of them have plagued unsuspecting Bahamians for generations. Further, these schemes are fundamentally detrimental to investors and the public,” Turnquest said while leading debate on the bill, which was eventually passed in the House of Assembly yesterday.

“The bill criminalizes the promotion or marketing of these financial schemes and empowers the commission to dissolve them where circumstances so warrant. It also empowers the commission to investigate and enforce against persons engaged in financial schemes.”

The bill also provides legal clarity to non-bank financial services while placing significant focus on customer protection.

There are currently 344 financial and corporate services licensees under the remit of the SCB.

Turnquest further noted that under this new bill, the SCB will now be charged with preventing abuses, market misconduct and other improper practices in regards to non-bank financial services and corporate services.

“As a part of the development of the bill, the commission aimed to hone its understanding of the financial and corporate services industry and in particular, the financial services that were being provided in The Bahamas. Among the things the commission observed was increasing non-bank financial services activities, such as offering loans to the public, payday advance services and retail businesses self-financing consumer goods,” Turnquest said.

“These all had implications for proper industry oversight to ensure that the consumers of these financial services were not abused and had appropriate protections under the law. Related to this, the commission also observed the continuing trend of scammers seeking to defraud Bahamians of their hard-earned money through unscrupulous financial schemes, with little legal recourse.”

The Financial and Corporate Service Providers Regulations, 2020 has also been drafted to support the bill and outline the standards that must be maintained within the industry with regard to client relations, Turnquest highlighted.

“Among them, licensees will be required to take all reasonable steps to ensure that information it provides to clients are presented fairly and clearly. The regulations also require that licensees protect clients’ personal data in keeping with the provisions of the Data Protection (Privacy of Personal Information) Act,” he said.

“Further, the regulations will require licensees to ensure their data protection measures adequately address the collection and storage of personal data, prevent unauthorized access to personal data and allow for the correction or erasure of inaccurate data.”

Progressive Liberal Party Deputy Leader Chester Cooper, who is also the Opposition’s shadow minister of finance, weighed in in support of the bill.

“I’m very glad that this legislation clearly outlaws financial schemes like Ponzi and pyramid schemes that prey on Bahamians who may not be well-versed in complex financial operations,” he said.

“We need to protect people from bad actors who claim that money just falls from the sky. Some have lost their life savings and we need to protect them and prevent this from happening again.”

The post Bill enshrines consumer protections against criminal financial schemes appeared first on The Nassau Guardian.

source https://thenassauguardian.com/bill-enshrines-consumer-protections-against-criminal-financial-schemes/