Manner of collection by a credit card issuer
"I have a credit card loan and I failed to pay the balance for several months now. A law firm affiliated with the bank has sent a letter stating that they will file a small claims suit against me. Is this allowed?Ellana
Dear Ellana,Please be informed of the provisions of Section 19 of Republic Act 10870 otherwise known as the ""Philippine Credit Card Industry Regulation Law,"" viz:
""Section 19. Appropriate Manner of Collection. - A credit card issuer may resort to all reasonable and legally permissible means to collect amounts due them under the credit card agreement: Provided that in the exercise of its rights and performance of duties, they must observe good faith, reasonable conduct and proper decorum, and refrain from engaging in unscrupulous acts.A credit card issuer or collection agent shall not harass, abuse or oppress any person or engage in any unfair practices, as may be defined by the Bangko Sentral ng Pilipinas rules and regulations, in connection with the collection of any credit card debt.""
Clearly, the aforementioned provision of law provides that a credit card issuer or its collection agent may only resort to all reasonable and legally permissible means to collect amounts due them under your credit card agreement. In your situation, the filing of a small claims or collection suit is the legal remedy for your credit issuer or collection agent to collect the amount due them. It must be stressed, however, that credit card issuers or collection agents are prohibited from engaging in methods that employ harassment, abuse or oppression in the collection of any amount due them.Otherwise, a credit card issuer or collection agent may be liable under Section 27 of the same act, viz:
""Section 27. Violation of this Act and Other Related Rules, Regulations, Orders or Instructions. - A person who willfully violates any provision of this act or any related rules, regulations, order or instructions, issued by the Monetary Board shall be punished by imprisonment of not less than two (2) years nor more than ten (10) years, or by a fine of not less than fifty thousand pesos (P50.000.00) but not more than two hundred thousand pesos (P200.000.00), or both, at the discretion of the court.""We hope that we were able to answer your queries. This advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.Editor's note: Dear PAO is a daily column of the Public Attorney's Office. Questions for Chief Acosta may be sent to email@example.com"
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"Manner of collection by a credit card issuer"
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and updated on 15 September 2021