By Wilnard Bacelonia
MANILA – The Senate conducted on Thursday a hearing to address the rampant and allegedly abusive debt collection tactics of online lending companies, citing a surge in complaints from distressed borrowers.
The hearing, presided over by Senator Raffy Tulfo under the Subcommittee on Banks, Financial Institutions, and Currencies, stemmed from Senate Resolution 746, which the senator authored.
The resolution highlights serious allegations against some lenders, including the public shaming of borrowers, libelous social media posts, and threats involving coffins and death.
Tulfo said many of these practices violate Republic Act 10173, or the Data Privacy Act of 2012.
“This has to stop! Although I still believe that debts should be paid… it’s not something we should resort to with violence,” he said.
He pointed out that while creditors have the right to collect payments, the methods used must remain ethical and legal, citing Section 1 of Securities and Exchange Commission Memorandum Circular 18, series of 2019, which prohibits the use of threats and contacting people from a borrower’s contact list unless they are co-makers or guarantors.
Despite previous raids by law enforcement agencies, many lending firms have managed to evade prosecution and continue operations, the senator noted.
The committee also tackled related issues, including alleged forgery in bank transactions and complaints against certain pawnshops.
Senator Sherwin Gatchalian echoed concerns over the exploitative practices of some financial institutions, particularly the imposition of excessive interest rates.
“There’s no financial institution that charges 50 percent as interest rates and deductions,” he said, adding that borrowers are often subjected to harassment and threats even for slight delays in repayment. (PNA)
