MANILA, Philippines — A bill filed by Parañaque City Rep. Edwin Olivarez wants banks and financial institutions to create a credit limit notification system app to ensure that credit cardholders are fully aware of how much they are spending in contactless transactions.
In filing House Bill No. 7110 or the proposed Real Time Credit Limit Notification Act, Olivarez cited the Filipinos’ growing preference for using contactless payments in groceries, bills, food and beverage and other services.
Convenience
“While the Philippines has lagged behind other Southeast Asian countries in actual credit card usage throughout the years, Filipinos nonetheless showed a huge appetite for new technology that bring convenience and security,” he said.
“As more and more Filipinos avail of the credit card service, the State has to be more vigilant in protecting their rights as consumers and ensuring that they do not fall on the traps of careless spending and, worse, incurring unnecessary and completely avoidable penalties from credit card companies,” Olivarez said, adding:
“Filipinos only need security and assurance that the credit card industry is not out there only to get their hard-earned money in the form of inadequately disclosed fines, surcharges and penalties.”
Protection
Through his proposed measure, Olivarez said the government would only be “intensifying its regulatory functions that would strike a good balance between the interest of this booming credit card industry and the interest of the people who work hard for the money.”
Under the bill, “every credit card issuer shall create or commission the creation of a credit card limit notification system or application for its credit cardholders that would be provide updated or real-time information on their outstanding credit card expenditure vis-a-vis the amount of their credit limit.”
Sanctions
The notification app, which should be created within a year of the measure’s enactment, would alert a credit cardholder of a potential breach of his or her credit cap and indicate the corresponding penalties and fees for going over the limit.
Credit card issuers who fail or refuse to come up with an app could face sanctions under Republic Act No. 7653 or the New Central Bank Act, and under RA 10870 or the Philippine Credit Card Industry Regulation Law.
Their authority to issue credit cards could also be suspended or canceled by the Bangko Sentral ng Pilipinas.