Last week, I reprinted the plight of one of my readers, who was a “victim” of unethical collection practices. Her particular email really stand out, as it was really something that I cannot stomach – the use of unfair collection tactics or unethical means to collect. I know that the debtor here is not entirely the victim per se, but there are strict written “rules of engagement” set by the Bangko Sentral ng Pilipinas (BSP) that protect the basic rights of debtors.
In the past, I have already written topics pertaining to this. Today, let me again enumerate some collection practices or “tactics” that are considered unethical: (a) making threats of violence, (b) using obscene language, (c) harassing telephone calls or calls at times known to be inconvenient, (d) impersonating government officials or lawyers, (e) misrepresenting a consumer’s legal right, (f) and collecting more than what is legally due. Moreover, third party collectors also are prohibited from discussing debt with third parties such as a neighbor, friend or associates. However, Collection Agencies can report the status of their accounts being handled (unless prohibited by contract) to credit bureaus. Credit bureaus and/or other credit reporting agencies around the world are recognized to gather and collate credit information, which includes information on debts placed for collection.
Until now, there are numerous complaints filed by consumers on the “unethical” tactics and “unfair” collection practices of some independent/ third party collection companies which utilize “shame campaign”, while some employs several “telecollectors”, on commission basis, to “harass” or threaten to serve “warrant of arrests” to debtors.
These unfair and unethical collection practices prompted the Bangko Sentral ng Pilipinas to issue CIRCULAR 454 SECTION 7 …. Subsecs. X320.14 and 4301N.14 to read, as follows (excerpts): …Without limiting the general application of the foregoing, the following conduct is a violation of this Subsection: a) the use or threat of violence or other criminal means to harm the physical person, reputation, or property of any person; b) the use of obscenities, insults, or profane language which amount to a criminal act or offense under applicable laws; c) disclosure of the names of credit cardholders who allegedly refuse to pay debts, except as allowed under Subsec. X320.9 and 4301N.9; d) threat to take any action that cannot legally be taken; e) communicating or threat to communicate to any person credit information which is known to be false, including failure to communicate that a debt is being disputed; f) any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a cardholder; and g) making contact at unreasonable/inconvenient times or hours which shall be defined as contact before 6:00 am. or after 10:00 pm., unless the account is past due for more than sixty (60) days or the cardholder has given express permission or said times are the only reasonable or convenient opportunities for contact.