Senate OKs bill protecting credit card holders from excessive charges

Voting 16-0, the Senate approved on third and final reading a bill seeking to protect the rights and interests of credit card holders against excessive charges and harassment from collection agents.

House Bill No. 5417 seeks to regulate the Philippine credit card industry by granting the Bangko Sentral ng Pilipinas (BSP) supervisory powers over credit card issuers, acquirers, and transactions.

BSP data showed that consumer complaints against credit cards companies had increased over the years, according to Senator Sergio Osmeña III, sponsor of the bill.

He said these include excessive charges, unauthorized fees, undisclosed charges, unfair collection and harassment practices by credit card collection agents.

“There has been persistent clamor from the public for us legislators to take proactive action towards protecting the consumers from potential credit card excesses while nurturing the economic benefits from the same,” he said.

The bill is among the “much-needed” reforms the Senate wants to introduce to the country’s banking and lending sector, with the intention of improving the overall business climate and upholding consumer rights and welfare, Senate President Franklin Drilon said.

Industry records showed that the number of active credit cards grew by 25.5 percent, from 6.584 million in 2009 to 8.268 million in 2014, Osmeña, chairman of the committee on banks, financial institutions, and currencies, said.

Appropriate collection practices

Aside from giving the BSP supervisory powers, House Bill No. 5417 or the proposed Philippine Credit Card Industry Regulation Law, mandates information confidentiality, and requires credit card issuers to establish a Consumer Assistance Unit within their ranks as an organization.

It defines “appropriate collection practices” and holds the credit card issuer responsible for all the actions of its collection agents.

“The end game for the bill is to be a catalyst that would establish a national policy on responsible credit services by the card issuers, on the one hand, and responsible debt management for the card holders, on the other,” Osmeña said.

The proposed measure reinforces the automatic adjustment of due dates that fall on a weekend or a regular national holiday to the next business day.

Violating any provisions of the proposed Philippine Credit Card Industry Regulation Law will be penalized by an imprisonment of two to 10 years or a fine of P50,000 to P200,000 or both, at the discretion of the court, Osmeña noted.

“We hope it inspires financial discipline at the micro-level and redound to the benefit of all in the long-haul. We have the collective responsibility to keep our credit market to operate in a safe and sound manner, and a legislative intervention is urgently needed to get our nation started towards this path of financial enlightenment and discipline,” the senator said. – VS, GMA News