Lawmaker proposes legislation vs abusive debt collection practices

MANILA, Philippines — A lawmaker has filed a bill that is intended to put a stop to the abusive practices of debt collectors and creditors.

In House Bill 8741, Camarines Sur Rep. LRay Villafuerte underscored that existing laws are “inadequate to protect borrowers” whose only recourse is Article 287 of the Penal Code.

This provision covers “unjust vexation” which is defined as any person who “commits a course of conduct directed at a specific person that causes substantial emotional distress in such a person and serves no legitimate purpose, with a penalty of arresto mayor in its minimum period of one month and one day to six months or a fine ranging from P500 to P5,000, or both.

“There is abundant evidence of the widespread use of abusive, deceptive and unfair debt collection practices by many creditors and debt collectors,” the bill’s explanatory note stated.

The measure also indicated that abusive debt collection practices have contributed to a number of “unwarranted personal bankruptcies, to marital instability, to loss of jobs and to invasions of individual privacy.”

Under the proposed legislation, it shall be unlawful for debt collectors to communicate with any person other than the consumer “for the purpose of acquiring information about the consumer.”

“A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress or abuse any person in connection with the collection of a debt,” it stated.

The measure also provides that a “debt collector may not use any false, deceptive or misleading representation or means in connection with the collection of any debt.”