Harassed by lending

collectors? Sue: SEC

TAGBILARAN CITY, Bohol (PIA)—Missed your installment payments on a borrowed money from a financial company or lending institution and is getting harassed, or your privacy invaded by them calling your contacts for that?

Then, file a complaint with the Securities and Exchange Commission (SEC) through their Financing and Lending Companies Division (FLCD).

Filing a complaint also secures a person important information: if the lending company contracted is indeed SEC registered, if their securities are registered and they own secondary licenses to offer investments to the public, and to assert one’s rights.

In fact, SEC has favorably ruled against a lending institution who used a third party agent in their collection.

While it may not be illegal, what the third party collector did was to engage in unfair, abusive debt collection practices.

In the complaint which SEC acted upon, a borrower claimed to have been subjected to unfair collection practices from the financing firm’s third-party collection agents over delayed payment.

These included intercepting him on the road to demand payment, sending him a series of text messages and communications exerting pressure for the immediate payment of partial amounts, threatening adverse consequences in the event of non-cooperation, among others.

SEC FLCD found violations of Section 1 (A), (B), and (H) of SEC Memorandum Circular (MC) No. 18, Series of 2019, and Section 4.4(A), (B), (H), and (I) of the implementing rules and regulations of Republic Act No. 11765, or the Financial Products and Services Consumer Protection Act (FCPA).

MC 18 and the FCPA provides for acts that constitute abusive and unfair debt collection practices which include the use or threat of use of violence, or other criminal means to harm a person, reputation, or property of any person; use of insults or profane language to abuse the borrower; and contacting the borrower’s contact list, other than those names as guarantors or co-makers.

According to FLCD, without a court order, intercepting the borrower on the road is not a legitimate collection practice and has the tendency to intimidate, restrain, or coerce.

Meanwhile, it also said the text messages and communications sent to the complainant were deemed to be tantamount to pressure intended to deter regulatory recourse and undermine consumer protection mechanisms.

By using a third party collection firm, the lending company cannot evade administrative accountability by attributing the prohibited acts to collection agents or third-party providers, as this allocation of responsibility accords with the FCPA IRR framework, recognizing solidary responsibility/solidary liability for regulated entities and their accredited third-party service providers engaged in marketing and transacting with financial consumers.

If you happen to be a victim of similar practices, SEC says: file a complaint, a downloadable complaint template can be had from their website: sec.gov.ph.

In the form, fill in all the necessary information needed for the complaint to be entertained, put in not applicable to those items that does not concern your complaint, according to the SEC.

Note, that the complaint may not be immediately acted upon, for insufficient data, the commission reminds.

After filling up the complaint form and having this reviewed, get this notarized and email the complaint to FLCD_COMPLAINTS@SEC.GOV.PH.

Attach in the complaint the supporting documents and affidavits that strengthen the accusations, and include a photocopy of the complainant’s government issued identification card.

Only one complaint form for every complained company, SEC instructed. (PIABohol)