Is your credit card overcharging you?

The government had better find a way fast to recompense the builder of the South Luzon Expressway. Any more delays could scare off foreign investors.

A Malaysian firm extended and expanded the 28-km SLEX into a well-lit six-lane connection between the Alabang Viaduct and Star Tollway. It sunk in billions of pesos to finish the works in a little over a year. For this it was granted permission to raise the old toll of 78 centavos per km to P2.68, or from P22 to P75 end-to-end.

The more than three-fold rate increase has raised the hackles of motorists. Initially there was confusion that the present Skyway rate itself, P120 from Makati to Alabang, would surge, but it’s actually only on the newly paved stretch.

Whatever, the basic issue remains: if the government invites an investor to build a public utility, it must repay that investor for work done right.

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The aim of the new congressional inquiries on jueteng is to legislate an end to the illegal numbers game. Senators and congressmen would do well to invite retired police colonel Wally Sombero as resource person. The man has studied where jueteng thrives, why the police have failed to curb it, and how the state can capture its multibillion-peso take.

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Does your credit card charge you interest and penalty of more than a percent each per month? If yes, then know that you are being overcharged.

The Supreme Court had so ruled last year unanimously in a division. It called “exorbitant, iniquitous, excessive” exactions on credit cards above one-percent interest and one-percent penalty, or a combined two percent, per month. (See http://sc.judiciary.gov.ph/jurisprudence/2009/september2009/175490.htm)

The ruling stemmed from a case filed 2006 by a credit card subsidiary of a major bank against a client. The metropolitan and regional trial courts had ruled for the card company charging monthly three-percent interest plus three-percent penalty. So did the Court of Appeals, although it revised the exactions to 1.5-percent interest and 1.5-percent penalty per month. The SC reversed the interest and penalty rates, however.

The SC ordered the card issuer to re-compute its excessive billing. The new bill was to be based on the highest allowable interest rate of one percent per month, or 12 percent per year.

The SC dismissed such arguments as:

• there is no longer any anti-usury law, and

• the card holder had agreed to the company’s terms and conditions, including the percentages to be charged.

On the first matter, the ruling stated: “We need not unsettle the principle we had affirmed in a plethora of cases that stipulated interest rates of 3% per month and higher are excessive, iniquitous, unconscionable and exorbitant. Such stipulations are void for being contrary to morals, if not against the law. While Central Bank Circular No. 905-82, which took effect on January 1, 1983, effectively removed the ceiling on interest rates for both secured and unsecured loans, regardless of maturity, nothing in the said circular could possibly be read as granting carte blanche authority to lenders to raise interest rates to levels which would either enslave their borrowers or lead to a hemorrhaging of their assets.”

On the second matter, the SC ruled: “Since the stipulation on the interest rates is void, it is as if there was no express contract thereon.”

Banks and credit card companies claim that the decision applies only case-to-case. Yet there is no other way to interpret it than that it covers all cases of overcharging of cardholders. To repeat, the SC “had affirmed in a plethora of cases that stipulated interest rates of 3% per month and higher are excessive, iniquitous, unconscionable and exorbitant.” To insist that the ruling is applicable only to whatever case a bank or credit card company prefers is to fool the cardholders.

The Bangko Sentral ng Pilipinas has the duty to inform the general public of the SC decision. Oddly, though, its financial and credit education programs make no mention of the crucial ruling in any seminar, brochure or website. Should we take this material omission as proof of where the BSP really stands on consumer advocacy?

Sources say the BSP prefers to interpret the SC decision in favor of the banks and card issuers, instead of the consumer. Despite the SC’s clear words to the contrary, the BSP insists that there is no more anti-usury law and the decision is only case-to-case. Neither the BSP nor its policy-making Monetary Board has moved to enforce the SC ruling. That is why banks and card companies continue to rake in billions of pesos in “unconscionable, exorbitant, excessive” fees from the uninformed public.

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MORE DOMESTIC TOURISM: For a romantic lunch with your special someone or simply to relax with the growing family, drive up to Marcia Adams Restaurant in Tagaytay. Marcia serves Mediterranean fused with treats from her sprawling garden, overlooking the Batangas coastline. Reserve a day ahead: (0917) 8011456 or [email protected]; J. Rizal Street, Barangay Sikat, Alfonso, Cavite, near Residence Inn Zoo.

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“Men say, ‘from the bottom of my heart.’ Should we rather not say, ‘from my bottomless heart’?” Shafts of Light, Fr. Guido Arguelles, SJ

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E-mail: [email protected]