A bill has been filed to penalize abusive lending and financing companies that employ unethical tactics to force borrowers to repay debts.
Sen. Robin Padilla introduced Senate Bill No. 2882, which seeks to address unethical practices in debt collection, including harassment, shaming, and misuse of personal information, by imposing stricter regulations on lending and financing companies.
“Over the years, the Securities and Exchange Commission (SEC), the National Data Privacy Commission, and law enforcement agencies have received numerous complaints against Financing Companies (FCs) and Lending Companies (LCs) harassing, shaming, and employing abusive, unethical, and unfair means upon their customers/clients to force the settlement of debts,” Padilla said in his bill.
The proposed measure aims to regulate the collection practices of FCs and LCs, prohibiting acts such as using threats of violence, profane language, or social media to humiliate borrowers, and disclosing personal information without consent.
The bill also addresses the misuse of third-party providers to evade responsibility, placing ultimate liability on the lending companies.
“This proposed measure declares it as a policy to regulate the collection practices of FCs and LCs to deter the use of means that are prejudicial to the interest of the public,” Padilla added.
Under the bill, penalties for violators would range from a P50,000 fine for the first offense to a revocation of the company’s operating certificate after the fourth offense, with subsequent violations carrying fines of up to P1 million and a suspension of lending activities.
Additionally, FCs and LCs must disclose their third-party service providers to regulatory bodies, including the SEC and Bangko Sentral ng Pilipinas (BSP), to ensure transparency in their debt collection practices.
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