Senator Win Gatchalian warned financial service providers anew, including online lending platforms, against continuing with their abusive debt collection practice, as he vowed to pursue the legislation criminalizing such acts.
“The other lending companies that have sprung up have become too daring. They will not stop until there is no law to hold them accountable for their wrongdoings. They even go so far as to humiliate and slander their creditors just to collect money,” he said yesterday.
The Securities and Exchange Commission has recently shut down the operations of King ABC Lending Corp., the company behind the online lending platforms Pondo Loan, Start Loan, Green Loan, Loan Club, and Familyhan Credit Corp., having been found to have committed unfair debt collection practices, threatening borrowers on social media, and various online platforms on made-up legal basis.
“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,” said Gatchalian, vice chairperson of the Senate Committee on Banks, Financial Institutions and Currencies.
In Senate Bill No. 2287, or the proposed Financial Products and Services Consumer Protection Act, financial service providers are prohibited from employing abusive collective or debt recovery practices and must respect the privacy and protect the data of their clients.
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.
Financial regulators, such as the Bangko Sentral ng Pilipinas, SEC, and Insurance Commission shall have the authority 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.
A financial regulator, consistent with the public interest and the protection of financial consumers, is authorized to institute an independent civil action on behalf of the aggrieved financial consumers, Gatchalian said.*PR