We have received questions pertaining to loan harassment over and over and let us address them once and for all.
Unfair collection practices
We have a law that protects consumers against harassment. The Bangko Sentral ng Pilipinas (BSP) Circular 454 provides the criteria for unfair collection practices. It states that:
Banks, subsidiary/affiliate credit card companies, collection agencies, counsels, and other agents may resort to all reasonable and legally permissible means to collect amounts due them under the credit card agreement: Provided, That in the exercise of their rights and performance of duties, they must observe good faith and reasonable conduct and refrain from engaging in unscrupulous or untoward acts. Without limiting the general application of the foregoing, the following conduct is a violation of this Subsection:
- The use or threat of violence or other criminal means to harm the physical person, reputation, or property of any person;
- The use of obscenities, insults, or profane language which amount to a criminal act or offense under applicable laws;
- Disclosure of the names of credit cardholders who allegedly refuse to pay debts, except as allowed under Subsec. X320.9 and 4301N.9;
- Threat to take any action that cannot legally be taken;
- Communicating or threat to communicate to any person credit information which is known to be false, including failure to communicate that a debt is being disputed;
- Any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a cardholder; and
- Making contact at unreasonable/inconvenient times or hours which shall be defined as contact before 6:00 A.M. or after 10:00 P.M., unless the account is past due for more than sixty (60) days or the cardholder has given express permission or said times are the only reasonable or convenient opportunities for contact.
For cases that may fall under this, you may contact the Financial Consumer Protection Department of the BSP at [email protected] or call 632-8708-7087. Be sure to document all communications with your debt collectors including text messages and e-mails. If possible and with the collector’s consent, have your conversation over the phone recorded.
SEC has now issued Memorandum Circular 18-19 enumerating which activities constitute prohibited unfair collection practices:
- The use or threat of use of violence or other criminal means to harm the physical person, reputation, or property of any person;
- The use of threats to take any action that cannot legally be taken;
- The use of obscenities, insults, or profane language the natural consequence of which is to abuse the borrower and/or which amount to a criminal act or offense under applicable laws;
- Disclosure or publication of the names and other personal information of borrowers who allegedly refuse to pay debts, except as may be allowed under Section 2 hereof;
- Communicating or threatening to communicate to any person loan information, which is known, or which should be known, to be false, including the failure to communicate that the debt is being disputed, except as may be allowed under Section 2 hereof;
- The use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a borrower; and
- Making contact at unreasonable/inconvenient times or hours, which shall be defined as contact before 6:00 A.M. or after 10:00 P.M., unless the account is past due for more than fifteen (15) days, or the borrower has given express consent that the said times are the only reasonable or convenient opportunities for contact. Such consent which shall be evidenced by written, electronic or recorded means, may be given prior to, during, or after the execution of the loan agreement.
- Notwithstanding the borrower’s consent, contacting the persons in the borrower’s contact list other than those who were named as guarantors or co-makers shall also constitute unfair debt collection practice.
Confidentiality of Information
In reference to the applicability of the Data Privacy Act of 2012 (R.A. 10173), financing and lending companies shall keep strictly confidential the data on the borrower except:
- If disclosure of information has written or recorded consent of the borrower;
- Release, submission or exchange of customer information with other financial institutions, credit information bureaus, lenders (potential or actual), their agents and/or representatives;
- Upon orders of a court of competent jurisdiction or any government office or agency authorized by law;
- Disclosure to collection agencies, counsels and other agents of the FCs and LCs to enforce the latter’s rights against the borrower;
- Disclosure to third party service providers solely for the purpose of assisting or rendering services to the FCs and LCs in the administration of its lending or financing business; and
- Disclosure to third parties such as insurance companies, solely for the purpose of insuring the FCs and LCs from borrower default or other credit loss, and the borrower from fraud or unauthorized charges.
How to file a complaint:
Download the Complaint Form here.
1. Always fill out the Complaint Form completely and accurately.
2. Do not forget to attach all your evidence/proof to support your complaint.
3. Submit ONE COMPLAINT FORM PER RESPONDENT COMPANY.
4. Providethe SEC with a valid government issued I.D.
After accomplishing the Complaint Form with all the requirements, you may file your complaint through the following:
1. Walk-in/Personal filing
You visit our office at Ground Floor, North Wing Hall, Secretariat Building, PICC Complex, Vicente Sotto Street, 1307 Pasay City, Monday through Friday from 8:00 am to 5:00 pm.
Bring an accomplished Complaint Form, with the following:
- Photocopy of your valid government-issued I.D.
- Supporting evidence/documents such as the disclosure statement, amortization schedule, receipts, promissory notes, and other relevant documents in connection with your loan transaction that will help us evaluate your complaint.
You may send an accomplished Complaint Form at [email protected], and attach a scanned copy of your valid government-issued I.D. and supporting evidence/documents such as disclosure statement, amortization schedule, receipts, promissory notes, and other relevant documents in connection with your loan transaction that will help us evaluate your complaint.
- Threatening the debtor about a case filed in court, especially criminal ones like estafa.
- Using barangay officials or police in assisting with the collection of loan debts.
- Forcing entry and intruding into debtors’ homes to collect money.
- Smearing the name or damaging the reputation of the debtor by calling or contacting his or her work colleagues, friends, family, or employer informing them that they have debts to pay.
- Bombarding the debtor with text messages or calls.
- Claiming the debtor will be reported to the NBI, police, has a pending warrant of arrest, has a hold departure order, or has been blacklisted in NBI, Police, etc.