SEC and NPC warn lending institutions against shaming debtors

Do you have an existing loan or credit with any lending institution or bank and have experienced being called or texted for the nth time collecting from you?  Have you also tried being threatened and texted with profane words by the collectors?

Debt shaming! This is one of the modus operandi of some debt collectors.  They resort to threatening the debtor so that they will be forced to pay.

Though the debtors have an obligation to pay because they borrowed money, they do not deserve to be harassed and embarrassed by the collectors.

Related to this, the Security and Exchange Commission (SEC) issued a circular warning financing companies, banks, lending companies and their third-party service providers could no longer harass borrowers and employ unfair means to collect debt.

Credit Information Corporation reported that the Security and Exchange Commission (SEC) issued a circular that said, “Financing companies, lending companies and third party service providers hired by them may resort to all reasonable and legally permissible means to collect amounts due them under the loan agreement provided that, in the exercise of their rights and performance of their duties, they must observe good faith and reasonable conduct and refrain from engaging in unscrupulous and untoward acts.”

Relatively, ABS-CBN News reported that the National Privacy Commission (NPC) said Friday that online lending operators who violate data privacy laws through public shaming may face fines and jail time.

According to the report, NPC commissioner Raymund Liboro said that creditors who violate data privacy laws through “debt-shaming” may face up to 7 years in jail and may be asked to pay fines of up to P5 million.

There are identified online lending firms that were reported to have violated  Republic Act 8556 or the Financing Company Act of 1998 and Republic Act 9474 or the Lending Company Regulation Act of 2007.

Liboro said that formal charges have been filed against the operators of three online lending firms and were given 10 days to submit a formal answer.

Online lending companies top the list like Complaints against PondoPeso Online Lending operator Fynamics Lending, Cashlending Online operator Unipeso Lending Company and Fast Cash Online Lending operator Cash Global Lending, which account for two thirds of the total record this year, the NPC said.

Among the complaints that were reported  include the use of contact list or phone directory without consent, disclosure of unwarranted or false information to other person, use of personal information for harassment and the unduly intrusive personal data processing, the NPC said.

Biggest danger dito, damage to the person is permanent… May mga nawalan ng trabaho. Even their employability is now in jeopardy,” Liboro said.

(The danger here is the damage to the person is permanent… Some lost their jobs. Even their employability is now in jeopardy.)

“Once ikaw ang mabigyan ng judgement, judgement of the mob, napakamahirap na,” he said.

(It’s difficult once the mob has judged you.)

The NPC earlier said it would work with other agencies to address the spike in complaints against “debt-shaming” by online lenders if borrowers were remiss in loan payments.

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