NextGen Day

Reps. Paolo Duterte of Davao City’s 1st District and Eric Yap of Benguet submitted a bill to eliminate unfair debt collection methods that have proliferated in recent years as well as violations of debtors’ rights to privacy.

The “Fair Debt Collection Practices Act,” also known as House Bill (HB) No. 6681, is a proposed law that would regulate debt collection tactics in order to protect borrowers from abuses, harassment, unfair treatment, and misrepresentations.

Duterte and Yap promised to end these irregularities and thought that HB 6681 is the solution to these problems.

Following a crackdown on unregistered lending firms, abusive debt collection techniques, and online harassment, Duterte claimed that online loan collections, particularly online lending sharks, have grown out of control.

In the meantime, according to Yap, the Department of Justice even highlighted the following actions as being in violation of the debtor’s rights: accessing the debtor’s phone book or contact list in order to send them messages in the event of late or non-payment; and, among other things, threatening the debtor with financial ruin and physical harm if they fail to pay off their account balances.

But most crucially, Yap added, “these lending institutions also impose excessive interest rates that are unfair to the creditors.”

The proposed rule also allows creditors to use any reasonable and legal means, including debt collectors, third-party service providers hired by creditors, online financing or lending applications, credit card companies, financing and lending companies, and debt collection agencies, to recover amounts owed to them under the loan agreement.

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