Unfair collection tactics

Last Friday, November 9, I was in Grand Men Seng Hotel in Davao City as one of the facilitators for a 2-day seminar on “Legal / Para-legal Tactics to Collect”. We have over 30 participants and most of them are non-attorneys.

One of the questions asked was concerning debt collectors and what they can and can’t do in the Philippines. Well, the Bangko Sentral ng Pilipinas already released a circular regarding limitations on debt collection.

The provisions included in the said circular place restrictions on debt collectors in connection with consumer debt. A consumer is defined as any natural person obligated or allegedly obligated to pay any debt. The term debt means any obligation or alleged obligation of a consumer to pay money arising out of a transaction where the money, property, insurance or services are primarily for personal, family or household purposes.

Unfortunately, there are several cases that debt collectors go beyond the provisions of this circular and make threat that are either false or intimidating. Overall as a universal practice, debt collectors may not: (1) Use the threat of violence or criminal means to harm the person, reputation or property of any person; (2) Use obscene or profane language; (3) Publish a list of persons who refuse to pay debts except to a credit-reporting agency; (4) Advertise the sale of any debt for the purpose of coercing payment of the debt; (5) Make repeated telephone calls or conversations with intent to annoy, abuse or harass any person at the called number; (6) Prohibited from using false, deceptive or misleading statements in an effort to collect debt including: represent that the collector is affiliated with any government or agency unless they truly are; (7) Make any false statement concerning the character, amount or legal status of the debt; (8) Make any false statement that the debt collector is an attorney or legal representative; (9) Make any claim that non-payment of the debt will result in arrest or imprisonment; (10) Make any claim that non-payment of the debt will result in seizure, garnishment or attachment of wages,  or sale of property unless such action is lawful and the creditor tends to take such action; (11) Threaten to take any action that cannot legally be taken or is not actually intended; (12) Falsely claim that the sale or any other transfer of the debt has or will result in the loss of any claim or defense to payment by the debtor; (13) Make false representation that the debtor committed a crime or other conduct to disgrace the debtor; (14) Communicating or threatening to communicate information that is known or should be known to false; (15) Use any written communication that falsely represents to be a document authorized or approved by a court of law or government agency.       

Lastly, it is a must practice that when a debt collector is attempting to contact or locate the debtor and makes contact with anyone other than the debtor, the collector is required to identify him or herself and, if requested, identify their employer and it is imperative that the debt collector must not reveal that the debtor owes any money among others. (to be continued)

(Mr. Ed F. Limtingco can be reached at 0917-7220521 or at [email protected])