House bill pushed to protect public from abusive debt collectors

In a statement on Monday, Davao City 1st District Rep. Paolo Duterte asked Congress to immediately tackle bills that would regulate the online lending industry once it resumes session after July 24.

Duterte said he filed House Bill (HB) No. 6681 last December 2022 to stop the harassment and unfair treatment of debtors.  However, it is still with the House committee on banks and financial intermediaries as of now.

“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. 

“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 added.

Duterte cited the case of the Philippine Association of Loan Shark Victims Inc. (PALSVI), which has recently sought the help of the Philippine National Police (PNP) against online lending companies which have either threatened, harassed, or shamed debtors who were unable to settle loans immediately.

According to Duterte, several online lending applications (OLAs) mentioned in the online petition mounted by PALSVI continue to be available on application stores — despite efforts from both the private companies to regulate the industry and the government to crack down on erring lending companies.

If HB No. 6681, authored by Duterte, Benguet Rep. Eric Yap, and ACT-CIS party-list Rep. Eric Yap is passed and enacted, the following acts that entail harassment and abuse would be prohibited:

• Use or threat of use of violence or other criminal means to harm the physical person, reputation, or property of the debtor or his /her family
• Use of obscene or profane language or language the natural consequence of which is to abuse or shame the debtor or his/her family and/or which amount to a criminal act or offense under applicable laws
• Disclosure or publication, or posting of the names and other personal information of the borrowers who allegedly refuse to pay debts, except as may be allowed in Section 10 of this Act
• advertisement for the sale of any debt to coerce payment of the debt
• Causing a telephone or mobile phone to ring or engaging any person in telephone or mobile phone conversation or communication repeatedly or continuously with intent to annoy, abuse, humiliate, or harass any person at the called or messaged number, except as provided in this Act
• placement of telephone or mobile phone calls or messages without meaningful disclosure of the caller’s identity

Section 8 of the bill also outlines unfair collection practices to protect debtors further.

“Granted that these acts are violative of the Cybercrime Prevention Act of 2012, the Data Privacy Act of 2012, the Securities and Exchange Commission (SEC) Memorandum Circular No. 18, series of 2019, and other salient provisions in the Revised Penal Code in relation to the said Cybercrime Act, the State is mandated to legislate on measures that will allow the stringent implementation of these penal laws,” the bill’s explanatory note said.

“In this regard, 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 disadvantage, thereby protecting borrowers against abuse and harassment in the collection of their debts,” it added.

 gsg/abc