MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has reminded the public not to use their ATM (automated teller machine) cards as collateral for any loans.
The BSP’s Financial Consumer Affairs Group (FCAG) warned that the use of ATM cards to secure a loan or entrusting the cards as well as the personal identification number (PIN) to creditors could lead to financial trouble.
“Avoid giving or entrusting your ATM account/card and PIN to others because this may create more financial trouble,” the BSP said.
It added that the creditors could withdraw more than the amount agreed upon as payment for the financial obligations.
“It would be difficult to monitor the deposits to your account and the withdrawals made by the person to whom you have given your ATM card and PIN,” the central bank added.
Instead, the BSP urged the public to avail of microfinance loans directly from banks and other small loan facilities.
Latest data showed that the BSP receives more than 140 complaints, inquiries, and requests per month, prompting authorities to further intensify their consumer education and protection program.
The BSP has received and addressed 8,561 complaints since FCAG was established five years ago. Complaints against unfair practices of credit card collection agencies topped the list with 2,400.
However, the central bank pointed out that the number of complaints represent only a measly 0.01 percent of the total number of credit card accounts that currently stand at 6.5 million.
There are about 4.5 million credit card holders in the Philippines.
FCAG was created in 2006 to assist financial consumers in the resolution of their complaints with entities supervised by the BSP and to deliver financial education programs to increase the public’s understanding of basic financial concepts to help them in making informed financial decisions.