Stiffer penalties against ‘abusive’ lenders pushed
DEPLORING questionable debt collection practices, Senator Sherwin T. Gatchalian is pushing early passage of remedial legislation imposing sanctions against abusive debt claimants.
The Senator on Sunday renewed warnings to financial service providers, as well as online lending platforms, to desist from their “abusive debt collection” practices, vowing to pursue early enactment an enabling law penalizing such acts.
Gatchalian griped that some daring lending companies that sprouted had become “too aggressive” and is not likely to stop their abusive practices until a law is passed imposing stiff penalties for violation.
(“Masyado nang mapangahas ang ibang lending companies na nagsulputan. Hindi sila titigil hangga’t walang batas na magpapanagot sa mga maling gawain nila. Umaabot pa sa puntong pamamahiya at paninirang puri ang ginagawa nila sa mga nangutang sa kanila para lang makasingil.”)
The senator observed the Securities and Exchange Commission (SEC) recently shut down operations of KINGABC Lending Corp., the company behind the online lending platforms Pondo Loan, Start Loan, Green Loan, Loan Club and Familyhan Credit Corp., after it was found to have committed unfair debt collection practices, “threatening borrowers on social media and various online platforms on made-up legal basis.”
The Senator suggested that “their liability should not only be administrative as some of the acts committed against the financial consumers already constitute criminal accountability such as infringement of data privacy and cyber harassment just to name a few.”
Sitting as Vice Chairman of the Senate Committee on Banks, Financial Institutions and Currencies said, Gatchalian filed Senate Bill 2287 to be known as “Financial Products and Services Consumer Protection Act,” prohibiting financial service providers from “employing abusive collective or debt recovery practices and must respect the privacy and protect their clients’ data.
Moreover, the bill includes penal provisions imposing “imprisonment of not less than one year and not more than five years or a fine of up to P2 million or both at the discretion of the court will be slapped against any person who violates the provisions of the bill or any related rules, regulations, orders or instructions issued by the financial regulators.
It adds that financial regulators, including the Bangko Sentral ng Pilipinas (BSP), SEC, and Insurance Commission (IC) shall be “authorized to impose enforcement actions on their respective supervised financial service providers such as restriction to collect excessive or unreasonable interests, fees, or charges; and imposition of fines, suspension, or penalties for non-compliance with this Act; among others.”
The Senator added that the financial regulator, “consistent with public interest and the protection of financial consumers, is authorized to institute an independent civil action on behalf of the aggrieved financial consumers.”