Consumer protection against unfair collection practices

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SUPERVISION AND EXAMINATION SECTOR OFFICE OF THE DEPUTY GOVERNOR

CIRCULAR LETTER NO. CL-2009-. 038

For All Banks and Non-Bank Financial Institutions

Subject: Consumer protection against unfair collection practices

connected with the credit collection practices of banks, collection companies, collection The Bangko Sentral ng Pilipinas (BSP) has been receiving complaints

to harm the physical person, reputation, or property of any person; the use of inconvenient times or hours. obscenities, insuits, or profane ianguage; and making contact at unreasonabler agencies and their agents, such as the use or threat of violence or other criminal means

agencies, counsels and other agents are hereby reminded that they may only resort to Regulations for Non-Bank Financial Institutions (MORNBFI) on Unfair Collection Practices which provides for inexclusive enumeration of conduct in violation of said credit card agreement, and in the exercise of their rights and performance of their duties, they must observe good faith and reasonable conduct and refrain from engaging in unscrupulous acts, pursuant to Subsection sX320.14 of the Manual of Regulations for Banks (MORB) and Subsections S4301N.14 and S4337Q.14 of the Manual of regulations. all reasonable and iegatly permissible means to collect amounts due them under the In view thereof, banks, subsidiary/affiliate credit card companies, collectior

banks to any or all of the following sanctions depending upon their severity: of the MORB and Subsections S4301N.15 and S4337Q.15 of the MORNBFI, subject Violation of abovementioned provisions shali, pursuant to Subsection Sx320.15

b. Prohibition of the bank concerned from the extension of additional credit a. Disqualification of the bank concerned from the credit facilities of the BsP except c. Penalties and sanctions provided under Section 36 and 37 of R.A. No. 7653 accommodation against personal security; and as may be allowed under Section 84 of R.A. No. 7653, the New Central Bank Act:

A. Mabini St., Malate 1004, Manila, Phitippines Trunkline (632) 524-70-11 URL.:www.bsp.gov.ph e-mail: [email protected] PANANALAPING MATATAG, BANSANG PANATAG

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subsidiary/affiliated credit card companies, collection agencies, and legal counsels, and may serve as basis for criminal sanctions that the BsP may file. Section 36 of R.A. No 7653 is applicable against unfair collection practices of

For your guidance and strict implementation

L2 C Mestor a. espenilloJr Deputy Governor

30 April 2009