In reaction to my previous post, “Tales of woe from Legacy scam victim,” some of you asked whether Letty’s “lucky” that her pre-need plan has been converted to a time deposit because the Philippine Deposit Insurance Corp. (PDIC) will now be required to pay her back.
I wish, for Letty’s sake and many others who were caught in the same crazy scam that that will be true.
Unfortunately, based on my interviews with sources at the PDIC, it will not be that simple. PDIC is, even as I write, going through the bank’s records with a fine-toothed comb to make sure it pays only “clean” accounts—meaning those that were deposited in good faith, with sufficient documentation (i.e. signature cards), adjusted for all interest due or deducted with loan payments due to the bank. That’s the mandate of the PDIC: pay only real depositors and make sure precious taxpayers’ money is not paid out to fictitious accounts or even to accounts that are the result of fraud.
Agents that converted pre-need plans to time deposits, while most likely only following instructions from the owners of the bank, were in fact defrauding the bank. Thus, the possibility for a payout on converted time deposits is slim, my source says. It really doesn’t look too good for planholders of Legacy. ☹
However, depositors in this situation should still try to claim at least their initial deposit. Maybe Letty can get her P25,000, but not the rest of the checks due for payment in five consecutive years. She will lose nothing by going to the bank and presenting documentation of her placements.
Here’s a guide for depositors of closed banks and the most common errors claimants make:
- Bring proper identification. You would think this would be obvious but PDIC says one of the top reasons depositors’ claims could not be processed is the lack of proper identification. Some bring ATM cards, credit cards, or membership cards in clubs. These will not be accepted. You need to bring any two of the following government-issued IDs that are not easily tampered with: SSS/GSIS ID, PRC License, Driver’s License, Senior Citizens ID, Passport, Company ID/School ID, TIN/Philhealth ID, Voter’s ID/Affidavit. If you are filing the claim in behalf of someone else, you need to bring the same thing, plus a special power of attorney. If the owner of the account is abroad, the Philipine Consul where he lives must authenticate the SPA.
- Bring sufficient evidence of your deposits. These include savings passbooks, certificate of time deposit, ATM card, unused checks and bank statement, and any other document you might have. The PDIC will be double-checking the consistency of the signature you use in your documents and the one in the bank’s records.
- You need to fill up three copies of the claim form from the PDIC and sign the “Signature of Depositor/Claimant over Printed Name” under the “To be accomplished by the Depositor/Claimant” portion in the Claim Form. Again, what the PDIC will be putting under the microscope is the integrity of the signature, making sure none are forged.
- If you are filing in person, you need to go to either the branch of the closed bank where you deposited your money or another site designated by the PDIC, or the PDIC Claims Counter located at PDIC Ayala Extension Office, SSS Building, corner V.A. Rufino St., (formerly Herrera St.), Makati City.
- You can also process your claim via mail through this address: The Assistant Vice President, Claims Processing Deparment Philippine Deposit Insurance Corporation 2228 Chino Roces Avenue 1231 Makati City, Philippines
- Call the claims Processing Department at 841-4604 up to 4607. Try inquiring also at the PDIC Depositors Assistance Bureau at (02) 8414630 or (02) 841-4631. I have dialed these numbers and found that PDIC staff are generally very accommodating and professional.
- Write to: The Assistant Vice President, Claims Processing Deparment, Philippine Deposit Insurance Corporation, 2228 Chino Roces Avenue 1231 Makati City, Philippines
- Inquire in person at the PDIC Ayala Extension Office, 6th Floor, SSS Building, V.A. Rufino St. (formerly Herrera St.) cor. Ayala Avenue, Makati City, Philippines,
- Make sure you have the following information ready at all times: name of the closed bank, name of the depositor; and claim number which is found on the upper right hand corner of the claim stub.
Hi Salve,
Can you feature stories of employees affected by the recession here in the Philippines? It started with Citibank, now Accenture, and then Intel. What are the rights of those laid-off (salary wise) and what should they do next as this is a major setback towards financial freedom. Thank you
In relation to the article above, at least PDIC is doing its job to protect real depositors. This extra measure will ward off attempts to make money from the government.
Poor Letty...
www.mytwentyfivecents.wordpress.com
I really wish the payouts would really start this Feb, I am patiently waiting for mine.
To:PBF
This financial contagion had been affecting both white and blue collared workers worldwide. Given the uncertainty as to when this global financial crises end, you must now evaluate alternatives you have to pursue career wise to maintain financial stability.
I am not sure if you have Social Security Unemployment insurance benefit similar to what what we have here in the U.S.A.
In the U.S. laid-off workers' unemployment benefit was extended recently from three months to five months due to this unfolding financial crises.
Without the above-mentioned unemployment benefit or enough emergency fund for up to six months overall cost of living, it will be a rough ride for you and your family while on the job hunt.
Here's what I'll do if I'm on your boots.
1. Get licensed (whatever required series)
to help small business owners set up Personal Equity Retirement Account (PERA). But be very selective of company and products you'll be offering to the public. Ethical agent/broker has always a vast opportunity to thrive no matter what economic conditions the Philippines is in. Even high end purveyors of flesh could be your clients. You'll do them a big favor by educating them and at the same time help them secure their financial future. The Public and Private market vendors, the Auto Repair shops owners, they are among the many small businesses that a good and ethical agent could build on his successful career toward financial freedom.
2. Small scale agri-business. If you have parcel of land, turned it into organic vegetation. Ampalaya, variety of herbs, and rosebuds never have short demands.
Small scale poultry raising. Maybe up to a thousand heads of fryers and five hundred layers to start with.
Goat and cow raising too. But I doubt if a city slicker/urban cowboy would be able to bear the smell of cow's dung especially during rainy season.
The preceding are suggestions only. I believe in the resourcefulness of every Filipino wherever they are.
Remain healthy and keep the faith.
First rule for depositors... Always deposit your money only with the large capitalized banks. The ones that are too big to fail.
The BSP here discriminates between small and the large universal banks.
Rural banks are not allowed the same liberalized rules as the universal banks.
The Legacy Group does not have the same privileges as the universal banks.
Look at the U.S. Their banking system is insolvent. That includes Citi and the other money center banks.
Sorry na lang if one is ignorant about the hierarchy of the banking system.
For those who have their placements in Legacy file class action suits versus the head of the BSP, PDIC and the the SEC.
They discriminate against the small depositors...
J_AG
Can you share more details as to why you believe BSP discriminates against small depositors?
Depositors in rural banks are not necessarily "small". High net worth individuals do place money in rural banks to take advantage of the high yields. They just make sure their placements fall just a little short of the insured limit. Total placement is usually "chopped" into smaller amounts under different account names. When you come to think of it, the ultimate "fall guy" here is the PDIC.
i am so glad you made a thorough investigation of my case.
i thank you and the many bloggers who are sympathetic with me. my sick stomach gets a temporary relief. my husband's "i told you so" has diminished ts volume too. :-).
this guide for depositors will help me and my colleagues to at least get our money back. you are right salve, i can settle for the 25,000. the rest can be charge to experience...well...(gullibility, gullibility)
anybody out there who can recommend a good mattres? the kind that can still give me a comfortable slumber even with my money under...
seriously guys, you help me a lot. thanks a lot. thank you salve.
i will keep you posted, perhaps get yourselves a cup of coffee espresso if i get my money back.
lol. sorry, not "get yourselves a cup of coffee", but i treat you out for a cup of coffee if i get my money back.
thanks. at least i can still laugh at my stupidity. i wonder though, can these people behind the Legacy Scam can still have a hearty laugh? can they sleep peacefully at night? tsk..tsk... i pity them...
Dios magbalos saindo gabos.
To: Letty,
unfortunately for our country, we have a bad record of arresting big time scam artist. the owner of manchester five is laughing with his new rich lifestyle in South Korea, how come he can't seem to be arrested?
the owner and big agents of Legacy is probably enjoying our money in some luxurious resort abroad.
Oh, I'm pretty sure they are sleeping soundly at night. Not to mention laughing their way to the bank with your money. Look at the Yuchengcos coming away with 250 million from Pacific Plans after walking away from their planholders. Maybe I'm a bit too unsophisticated, but that just seems so wrong.
Melvin--- universal banks when the screw up they become too big to fail and since they control the largest share of deposits in the banking system allowing them to go bust would create massive problems.
Even the PDIC would not have enough funds to bail out the depositors. They are also leveraged.
After the last Asian Crisis in 1997 the BSP allowed the big banks to off load their bad assets into SPAVS. The they forced banks to merge to increase their base capital with infusions from the PDIC and the BSP itself.
Look at UCPB. Why did the BSP not shut them down. They were insolvent.
The entire banking system in the U.S. has a capital base of $1.5 trillion dollars.
Right now it is calculated that they have combined about $3.5 trillion worth of distressed assets on their books.
Ordinarly they should be allowed to fail and the stockholders and deposits should bear the brunt of the failure.
What would happen to confidence in the banking system if a large bank like CitiBank were to declare a bank holiday? The depositors and stockholders in Citi include governments and the public at large.
That would make the last depression a picnic if that were allowed to happen. Then even banbks like JP MorganChase, Bank of America would loose the confidence of depositors around the world.
The major money center banks hold more than half the deposits of the U.S. banking system.
Banks area actually quasi public utilities..The ultimate guarantor of all deposits are the taxpayers.
Goldman Sachs, Morgan Stanley, GMAC G.E. Finance all turned themselves into bank holding companies so that they would have access to FDIC funds.
Legacy Group turned all their pre-need contracts into time deposits to get their clients guranttees on principal amounts within the limits.
The U.S. Treasury and the Federal Reserve are moving to buy out credit card debts and other consumer loans from banks to save banks from going down.
The BSP and the PDIC should explain their discriminatory policies versus the small.
Unless they want to get their hands on some of the assets for themselves.
The beauty of money is that it leaves a documented trail.
The owners and operators of that failed institution get away with grand larceny only with the express help of the BSP and the other regulatory agencies.
J_AG
I think I understand your statements now. You seem to argue that from a moral perspective, if the central bank bails out big universal banks from their bad loans and toxic investments, then the central bank should also bail out the small rural banks. All is fair. In the current situation, the authorities and the regulators are themselves to blame for lack of oversight and regulation.
I think the BSP had intended to close those rural banks one at a time much earlier, but the wily Legacy Group secured a TRO against the BSP. When the latter finally won its case at the Supreme Court, only then was it able to carry out the closure, which was unfortunate because it appeared to many that the banks are folding up simultaneously.
Hi,
I have invested several millions in Philippine government securities (fixed rate treasury note, ROP) through a local bank. What will happen to these investments if the bank closes? Can I claim this from the government?
Martin,
If you bought the actual treasury note or ROP bond, and not a bond fund, then there is usually a third-party custodian or keeper of your securities. In my previous transaction with BDO, it is either Standard Chartered Bank or the Bureau of Treasury itself. Remember that you signed one of those forms that authorized these entities to keep them for you. Treasury notes or bonds are guaranteed by the Philippine government. The interest payment is credited to a bank account that you have specified. Upon maturity the principal is likewise credited to the specified account.
I have heard of cases where PDIC gives depositors a hard time in claiming checks.
They are now requiring personal appearances for depositors and this would mean hours of waiting and/or going back to PDIC office.
"You might be surprised, but some do get their money within an hour or so. The entire process will depend on whether your documents are complete and in order, and on the status of the documents within the closed bank".
Yes I am surprised!
This is what PDIC officials told us Depositors at a series of 'Depositors Forums', arranged by the PDIC around the Philippines. I attended the one at Mandaue City Sports complex in February 2009. They told us then that we would get paid when we handed ur claims in, or within a few hours!
Well we (myself, my wife, and her daughter) handed in Claims, for some 4 x Legacy Group Banks on March 23-25 2009. Rural Bank of DARBCI was handed in on Apil 20th @ Visayan Regional Claims Center. In total some 46 x Claims submitted.
None of those 46 Claims were paid out on handing the Claims Forms in, or within a few hours. The PDIC have managed to pay some 10 x Claims after 4 months, or later. I eventually received all my submitted Claims for 'Bank of East Asia', and so has my Step Daughter. My wife had 'problems' caused by these Deposits being in her 'Maiden Name' (as she had no valid ID in her Married Name back in 2005). However she submitted the Claim under her Maiden Name that should have matched the Banks Records, and ID submitted to open the Account. After PDIC requested i) Copy of Marriage Certificate (PDIC Claims officer refused to accept this, at time of submitting Claim on March 23), ii) Affidavits of Co-ownership x 2, iii) Submit 2 x Claims Forms, again, she did receive her 2 x Half shares of Joint Account with me and the other with her daughter. She is still waiting for her Single Account Deposit claim payment some 5 months from submitting, and no request from PDIC, for any additional information in respect of this Deposit of hers.
Phone calls to the PDIC (to check on why this payment not been made when 9 other Claims for this Bank have been paid to husband and daughter, including her Joint Accounts), just get 'glib' rehearsed, stock reply of "Your claim is still being processed and validated, you will receive a payment in the post, or a letter stating the status of your claim, and any additional documentation that may be required".
Yeh right, like some 5 months later they still processing and validating when they already paid her 2 x Joint Accounts? More likely the PDIC dont have the cash funds to cover any more payments until they receive more funds from Bank insurance premiums?
The other possibility being they mailed her payment Check to the wrong address!
Yes, incredible as it may sound, that is what the PDIC did with her last payment Check. The Mailing envelope showed 'Talisay 6045' with the correct ZIP Code, but for some unexplained reason or sheer negligence in the PDIC, then put 'Agusan Del Norte' to the address. The Philippine Postal service ignored the ZIP Code and delivered to 'Agustan del Norte'. It then had to be rerouted back to Cebu, then to Talisay 6045 Post Office. This delayed my wife receiving he rneeded payment check, by 3 weeks!
Who knows if the PDIC mailed any more payment checks to the wrong addresses?
It is supposed to be Registered Mail, yet the PDIC staff, manning the PDIC 'Hot Lines', cant tell any details of Checks mailed - no Date Submitted, no Refererence No., and no Delivery Confirmation. Had they used a 'Courier', they should be able to give a 'Tracking No., which could then be entered into a search system of that Courier and say exactly what was the Address, the Date received and Status as to being Delivered, who signed for Delivery.
You would think the PDIC would take the mailing of these Payment Checks a lot more seriously. One has to sign at the Post Office to receive the Registered Mail, then with Payment Check, have to Sign and return in Pre-paid Mailing Envelope to the PDIC, a signed acknowledgment, that the person so named on the payment check received such. Why is there Alarm Bells triggered if the PDIC don't get that Acknowledgment Receipt back after 3 weeks max?
Why does the PDIC not have a secure SQL Database, that such PDIC Officers manning these 'Hot Lines' can sign in and access, that can be searched under i) Bank Name, Claim No, Submission Date, Claimant Surname?
I think the answer to this being the PDIC don't want to process such Claims quickly and efficiently?
Section 14 of the PDIC charter states:-
"SECTION 14. Whenever an insured bank shall have been closed by the Monetary Board pursuant to Section 30 of R.A. 7653, payment of the insured deposits on such closed bank shall be made by the Corporation as soon as possible either (1) by cash or (2) by making available to each depositor a transferred deposit in another insured bank in an amount equal to insured deposit of such depositor...."
No mention of delaying payment of Claims for 5 months after submitting, and mailing of check payments to the wrong address?
Well time is running out for the PDIC, since Section 14 of the PDIC charter, goes on to also add:-
"Provided, further, That failure to settle the claim, within six (6) months from the date of filing of claim for insured deposit, where such failure was due to grave abuse of discretion, gross negligence, bad faith, or malice, shall, upon conviction, subject the directors, officers or employees of the Corporation responsible for the delay, to imprisonment from six (6) months to one (1) year:..."
I am not a Lawyer, but will be speaking to one, to ascertain if the PDIC have failed to even communicate with the Depositor, by Telephone, e-mail or posted mail, about any problems preventing payment 'as soon as possible', and not requested any additional supporting document or evidence to establish bone fide Deposit was made at that Bank with 'proof of payment' able to be given be said Depositor, if requested, then they can indeed be prosecuted for "grave abuse of discretion, gross negligence, bad faith, or malice".
Other than a request for my wife to submit 'Affidavit of co-ownership' for her Joint Account @ 'Pilipino Rural Bank' over a months ago (and this was couriered back to PDIC with confirmed delivery, well before the 'deadline' quoted, still no payment nearly a month later!
No communication at all. for the 35 other outstanding Deposit Claims at this Pilipino Rural Bank, and 3 other Legacy Group Banks.
"The PDIC took over RURAL BANK OF POLANGUI (ALBAY), INC., its assets, records and affairs on February 27, 2009".
How come not a single announcement of 'Claims Acceptance' for this closed Bank, some 6 months later!
"The PDIC took over RURAL BANK OF MABINAY (NEGROS ORIENTAL), INC., and its branch, assets, records and affairs on May 29, 2009"
Only 3 months since this Bank was Closed, so looks like the PDIC's claim for 'Turn Around Time (TAT)' for announcing Claims acceptance from taking over such closed bank, of 9 x working days, or less, has gone 'out of the window'?
This Bank was part of the 'CLS Group', so not connected with Legacy Group. The PDIC will have to come up with new excuses for taking longer than 9 x working days!
Super-puper site!
You are the greatest!