Online lenders barred to access borrowers’ phones
Lenders operating online apps that can be installed in smartphones are prohibited from harvesting personal information, such as phone and social media contact lists, for harassing delinquent borrowers
The National Privacy Commission (NPC) released its latest memorandum circular to prohibit online lenders from accessing the mobile phones of its borrowers following some complaints of humiliation and harassing delinquent borrowers after online lending boomed since last year.
According to the NPC, this practice caused affected borrowers’ reputation and violating their rights as data subjects.
Under Circular 20-01 signed by NPC commissioner Raymund Liboro, lenders operating online apps that can be installed in smartphones are prohibited from harvesting personal information, such as phone and social media contact lists, for harassing delinquent borrowers.
The harassment and shaming of delinquent borrowers before relatives, friends and colleagues persist despite separate orders last year from the NPC and the Securities and Exchange Commission (SEC) to shut down errant online creditors.
“When the circular comes into effect 15 days after its publication in the Official Gazette or two newspapers of general circulation, all lending and financing companies in possession of their borrowers’ contact lists in whatever form in violation of the guidelines shall dispose of the information in a secure manner that would prevent further unauthorized processing, access, or disclosure to any other party or the public,” Liboro said in a statement.
“The National Privacy Commission is issuing this circular for the appropriate and respectable treatment of borrower’s personal information,’’ Liboro added.
He emphasized that online lending applications should design their business processes with privacy by design and default, and with complete adherence with the principles of the Data Privacy Act.
“Once again we remind online lending operators and businesses to take their customers’ data privacy seriously and deploy adequate security measures. For the public, we hope this circular will help them keep an eye out for red flags while they are in the process of borrowing money from online lenders,’’ Liboro added.