SEC readies penalties against unfair debt collection practices
MANILA, Philippines — The Securities and Exchange Commission has released a draft memorandum circular that proposes penalties and sanctions against financing and lending companies that use threats and other unfair debt collection practices.
Under the new memo, unfair collection practices include the use of threats, violence or excessive communication, and public disclosure of personal and even false information about the borrower.
Issued May 20, the resolution protects borrowers from harassment by creditors.
According to reports received by the SEC, some borrowers have been threatened by collection agents with having their personal information leaked online.
Some were also spammed through third-party services, according to National Privacy Commissioner Raymund Liboro at a forum on Thursday.
"As the overseer of financing and lending companies, the commission will take all the necessary steps to tackle abusive, unethical and unfair practices of collecting debt,” said SEC Chairperson Emilio Aquino.
The SEC said that while companies should pursue the collection of amounts owed to them, they should also do this through fair and true collection practices.
“In parallel, we will intensify our efforts to promote responsible borrowing,” SEC Chairperson Aquino added.
Lending and financing companies found to be using unfair debt collection practices face a fine of P25,000 and P50,000 pesos, respectively, on their first offense.
A second offense will get them a fine of P50,000 and P100,000, respectively.
A third offense will be penalized with the suspension or revocation of the corporation's Certificate of Authority to Operate. — Philstar.com intern Blanch Marie Ancla