credit card: unfair collection practices & other credit cards law
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AC 202 AC 202 PatrolPatrol
With Reporters
Lexi Culajara
Jean Villanueva
AndJomelyn Borlaza
CREDIT CARDCREDIT CARD::THE Senate committee on banks, financial institutions and currencies was urged to investigate the reported unfair practices and rude conduct of credit card collection agencies, as well as the unjust interests imposed and the breach of confidentiality of cardholders' information by credit card companies.The probe, in aid of legislation, aims to review and strengthen measures for the protection of consumers' welfare, explained Senator Manny Villar in proposed Senate Resolution 421, noting that more and more consumers are using their credit cards instead of cash to pay for goods or services.
"Data showed that credit card receivables of universal, commercial and thrift banks amounted to P133.93-billion as of end-September 2010 or P3.76B more than the P130.17B registered in the same period in 2009 as consumers turned to their credit cards to finance the purchase of goods and services," the proposal added.
But it stressed that as per the Financial Consumer Affairs Group (FCAG) of the Bangko Sentral ng Pilipinas, 2,400 of the 8,561 complaints received from 2006 to present involved credit cards, particularly unfair collection practices, despite several BSP circulars on credit card transactions.
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UNFAIR COLLECTION PRACTICES & UNFAIR COLLECTION PRACTICES & OTHER CREDIT CARDS LAWOTHER CREDIT CARDS LAW
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Are you having difficulties in paying Are you having difficulties in paying your credit card debt?your credit card debt?
Violation of the RegulationViolation of the Regulation
Page. 3Page. 3
Unfair Collection PracticesUnfair Collection Practices
Bangko Sentral ng Pilipinas (BSP) regulations require that credit collection agencies treat you fairly and prohibit certain methods of debt collection.
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If you find that you are in trouble paying your credit card bills, contact your credit card company immediately. Try to work out a modified payment plan that reduces your payables to a more manageable level.
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Use of Threat of ViolenceUse of Threat of Violence
Disclosure of theDisclosure of thenames of creditnames of creditCardholdersCardholdersPage. 4Page. 4
Use of OBSCENITIES, Use of OBSCENITIES, INSULTS or PROFANE INSULTS or PROFANE LANGUAGELANGUAGE
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The central bank pointed out that some credit card firms are behaving in abusive and unfair manner, sometimes intimidating cardholders with legal or physical threats for not paying on time.
NEWS
Threats to take actions that cannot Threats to take actions that cannot be legally takenbe legally taken
Threat to communicateThreat to communicateto any person falseto any person falsecredit information! credit information! Page 5Page 5
False False Representation Representation or Deceptive or Deceptive means to means to collect debtcollect debtSome consumers have reported debt collectors showing up at their homes, flashing something that looks like a badge and claiming to be plain clothed police officers.
The fair debt collection law prohibits false, deceptive or misleading tactics when trying to collect debts. Impersonating an officer is a crime in many jurisdictions and consumer credit counselors advise consumers to contact their local police departments if this occurs.
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An example is the case of debts that have gone beyond the statute of limitations -- the deadline for filing lawsuits. Debt collectors may not threaten to file suit in these cases because the statute of limitations has expired.
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Contacting the Cardholder at Contacting the Cardholder at unreasonable/ inconvenient timesunreasonable/ inconvenient times
Other laws, rules and Other laws, rules and regulations on credit cardsregulations on credit cards
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Calling the consumer repeatedly, hanging up, calling and not saying anything, anonymous phone calls or any other telephone behavior intended to annoy, harass or abuse the consumer, their family members, neighbors or co-workers is also prohibited by the law.
R.A. No. 8484 (Access Devices Regulation Act)Section 4
Requires that, any application to open a credit card account for any person under an open-end credit plan or a solicitation to open such an account, either by mail, telephone or other means, shall disclose the following information in writing or orally, as the case may be:
The annual percentage rate
The amount of any annual fees and other fees
A detailed explanation of method used in determining the balance upon which the finance charge is computed
Any fee imposed for an extension of credit in the form of cash
R.A. No. 8484 (Access Devices Regulation Act)Section 14
States that if a cardholder who abandons or surreptitiously leaves his/her residence, place of business or employment as stated in his/her credit card application, without informing the bank or credit card company where he/she could be actually contacted, and if at the time of such abandonment or surreptitious leaving, the outstanding and unpaid balance is past due for at least ninety (90) days and is more than Ten thousand pesos (Php10,000.00), shall be prima facie presumed to have used his/her credit card with intent to defraud.
Manual of Regulations for Banks & NBFIsSubsection X320.4 of MORB; Subsections 4301N.4 and 4337Q.4 of MORNBFIRequires disclosure of the following items:
• Non-finance charges, individually itemized, which are paid or to be paid by the cardholder in connection with the transaction but which are not incident to the extension of the credit.
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• Percentage that the interest bears to the total amount to be financed expressed as a simple monthly or annual rate on the outstanding balance of the obligation.
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Subsection X20.4 of MORB; Subsections 4301N.4 and 4337Q.4 of MORNBFI
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• Effective interest rate per annum
• For installment loans, the number of installments, amortization schedules
• The default, late payment/ penalty fees or delinquency-related charges.
• The conditions under which interest maybe imposed, including the time period, w/in which any credit extended maybe repaid w/o interest.
• The method of determining the balance upon which interest and/or delinquency charges maybe imposed.
• The method of determining the amount of interest and/or delinquency charges., including any minimum or fixed amount imposed as interest and/or delinquency charge.
• Where one or more periodic rates may be used to compute interest, each such rate, the range of balances to w/c it is applicable, and the corresponding simple annual rate.
• Membership/renewal fees, processing fees, collection fees, credit investigation fees and attorney’s fees .
• For transaction made in foreign currencies and/or outside the Philippines, for dual currency accounts (pesos and dollar billings), as well as payments made by credit cardholders in any currency other than the billing currency:• the application of payments
• the manner of conversion
• definition or general description of verifiable blended exchange/ conversion rates including conversion commission
• other currency conversion charges and costs
Manual of Regulations for Banks & NBFIsSubsection X320.7, MORB; Subsections 4301N.7 and 4337Q.7, MORNBFIProvide that the card issuer and the cardholder may, prior to the consummation of the transaction, agree in writing to a deferral of all or part of one or more unpaid installments, and the bank may collect a deferral charge which shall not exceed the rate previously disclosed pursuant to the provision on disclosure
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Subsection X320.8, MORB; Subsections 4301N.8 and 4337Q.8,MORNBFI,
Require that:• no late payment or penalty shall be collected;• late payment or penalty fees may be based on the unpaid
minimum amount due or prescribed minimum fixed amount; and• said late payment or penalty fees may be based on the total
outstanding balance of the credit card obligation including amounts payable.
Manual of Regulations for Banks & NBFIsSubsection X320.9, MORB; Subsections 4301N.9 and 4337Q.9, MORNBFIRequire credit card companies to retain confidentiality of information of cardholder except under the following circumstances:
Disclosure of information is with the consent of the cardholder;
Release, submission or exchange of customer information with other financial institutions, credit information bureaus, credit card issuers, their subsidiaries and affiliates;
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Upon orders of a court of competent jurisdiction or any
government office or agency authorized by law, or as prescribed by Monetary Board;
Disclosure to collection agencies, counsels and other agents of the bank or card company to
enforce its rights against the cardholder;
Disclosure to third party service providers; and
Disclosure to third parties such as insurance companies.
Manual of Regulations for Banks & NBFIs
Subsection X320.12, MORB; Subsections 4301N.12 and 4337Q.12, MORNBFI,Require the credit card issuer to inform/notify the cardholder in the agreement, contract or any equivalent document governing the issuance or use of the credit card that, pursuant to the provisions of Articles 1278 to 1290 of the New Civil Code of the Philippines, as amended, the use of credit card will subject his/her deposit/s with the bank to the offset against any amount/s due and payable on his/her credit card which have not been paid in accordance with the terms of the agreement/contract.
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Subsection X320.10, MORB; Subsections 4301N.10 and 4337Q.10, MORNBFI,Require card issuers to include in their contract with cardholders a provision authorizing the issuer to suspend or terminate the effectivity of the right to use the card, if circumstances warrant.
References: http://www.creditcards.com/credit-card-news/help/fair-debt-collection-
practices-act-6000.php
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In libris graecis appetere mea. At vim odio lorem omnes, pri id iuvaret partiendo. Vivendo menandri et sed. Lorem volumus blandit cu has.Sit cu alia porro fuisset.