Solon wants financial borrowers protected from abusive lenders

By Filane Mikee Cervantes

July 10, 2023, 7:22 pm

<p>Davao City Representative Paolo Duterte <em>(Photo courtesy of HOR)</em></p>

Davao City Representative Paolo Duterte (Photo courtesy of HOR)

MANILA – Davao City Rep. Paolo Duterte on Monday urged Congress to immediately pass a bill that would regulate the online lending industry and expressly prohibit unfair, deceptive and shameful debt collection practices.

Duterte said House Bill (HB) 6681 would protect financial borrowers from public shaming, extortionate interest charges and other "vicious" online lending practices.

“More victims have continued to come out to report being harassed, shamed, threatened and forced to pay usurious interest charges. Both the Executive and Congress need to act fast to put an end to these inhumane debt collection practices,” Duterte said in a statement.

He cited an online petition spearheaded by the Philippine Association of Loan Shark Victims Inc. (PALSVI) appealing for the government to shut down about 101 online lending applications (OLAs) that have threatened, embarrassed, intimidated and caused "utter grief to the unfortunate victims.”

The PALSVI members have also filed complaints before the Philippine National Police (PNP) Anti-Cybercrime Group against several online lending companies.

Duterte acknowledged the efforts of the Securities and Exchange Commission (SEC) in sustaining its crackdown against erring lending companies by canceling their registrations, shutting them down and securing convictions in courts against some of their operators.

He, however, stressed the need for a law that would tighten regulation over online moneylenders in order to prevent abusive debt collectors to proliferate in cyberspace.

“Our laws need to catch up with technology, which while providing ease and convenience to consumers, have also given rise to abusive practices that have ruined not only the reputations, but also the lives of their victims,” he said.

He pointed out that the illegal and abusive practices of online lenders violate the provisions of various laws and regulations, such as the Cybercrime Prevention Act, the Data Privacy Act, the Revised Penal Code and SEC Memorandum No. 18, series 2019.

He argued that there is still a necessity to legislate measures that will allow the stringent implementation of these penal laws.

Under HB 6681 or the proposed Fair Debt Collection Practices Act, a debt collector is prohibited from engaging in any conduct that is intended to “harass, oppress, humiliate, or abuse any debtor in connection with the collection of a debt.”

The measure stipulates prohibited acts such as the use or threat of violence, or other criminal means; the use of obscene and profane language; and the disclosure, publication or posting of the names and other personal information of the borrowers who allegedly refuse to pay debts.

The measure prohibits the collection of any amount such as interest, incidental fees and other charges, unless such amount is expressly authorized by the agreement creating the debt or permitted by law. It also prohibits false, deceptive and misleading representation in collecting debts.

"This proposed bill aims to prohibit and eliminate the use of abusive, deceptive and unfair debt collection practices by debt collectors and to ensure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, thereby protecting borrowers against abuse and harassment in the collection of their debts," he said. (PNA)