Win Gatchalian Assures Law Against Abusive Lending Companies Abusing Clients
Senator Win Gatchalian assures the public to pursue a law against abusive lending companies and loan sharks who threaten their clients that are not paying in time.
Gatchalian issued a warning to all financial service providers, including online lending platforms, about using abusive debt collection practices on their clients’ arrears. Gatchalian stated in the statement that he will argue for the imposition of a prison sentence for anyone who harasses and abuses a debtor through violent collectors.
“Masyado nang mapangahas ang ibang lending companies na nagsulputan. Hindi sila titigil hangga’t walang batas na magpapanagot sa mga maling gawain nila. Umaabot pa sa puntong pamamahiya at paninirang puri ang ginagawa nila sa mga nangutang sa kanila para lang makasingil,” said Gatchalian.
The Securities and Exchange Commission (SEC) recently ordered KingABC Lending Corp., the parent company of online lending platforms Fund Loan, Start Loan, Green Loan, Loan Club, and Familyhan Credit Corp., to close due to unfair debt collection practices, threats on social media, and threats to file a lawsuit.
“Hindi lamang administratibo ang dapat na maging pananagutan nila dahil ang mga maling gawain nila laban sa mga onsyumer tulad ng paglabag sa data privacy at cyber harassment ay may karampatang kriminal na parusa,” said the Vice Chairperson of the Senate Committee on Banks, Financial Institutions and Currencies.
Gatchalian’s Senate Bill No. 2287, or the proposed “Financial Products and Services Consumer Protection Act,” prevents financial service providers from using unfair collection practices against their debtors, and they must respect their clients’ privacy and personal information.
Anyone who violates the requirements of Gatchalian’s law will face a minimum of one year in prison and a maximum of five years in prison, or a fine of up to P2 million, or both, depending on the court’s decision. This is on top of any penalties imposed by financial regulators under existing regulations or laws.
According to Gatchalian, financial regulators such as the Central Bank of the Philippines (BSP), Securities and Exchange Commission (SEC), and Insurance Commission (IC) will be empowered to take appropriate actions against supervised financial service providers, such as prohibiting excessive or high interest fees or charges, as well as imposing fines, suspensions, or other penalties for non-compliance with the bill.
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