Sen. Robinhood “Robin” C. Padilla has filed a bill to punish abusive landing and financing companies that force borrowers to settle their debts through harassment, shaming and similar practices.

Padilla filed Senate Bill 2882, after noting RA 9474 (the Lending Company Regulation Act) and RA 7394 (Consumer Act) do not have enough protections against such unethical practices.

“Over the years, the Securities and Exchange Commission (SEC), the National Data Privacy Commission and law enforcement agencies have received numerous complaints against Financing Companies (FCs) and Lending Companies (LCs) harassing, shaming, and employing abusive, unethical, and unfair means upon their customers/clients to force the settlement of debts. Likewise, there has been a proliferation of misuse of customer/client personal information and the public disclosure of unpaid loans or balances,” he said in his bill.

He added such lending companies even use third-party providers to evade liability from such unethical practices.

Padilla said his bill imposes on FCs and LCs the ultimate responsibility for the prohibited acts, to address the intentional evasion of liability.

“This proposed measure declares it as a policy to regulate the collection practices of FCs and LCs to deter the use of means that are prejudicial to the interest of the public,” he said.

Under the bill, prohibited acts include:

• Use of threat of violence or harm
• Use of obscenities, insults or profane language to abuse the borrower
• Use of social media and other online platforms to humiliate the borrower
• Disclosure or publication of borrowers’ personal information
• Contacting the borrower at unreasonable or inconvenient hours

“Notwithstanding the borrower’s consent, contacting the persons relatives, colleagues, or acquaintances other than those named as guarantors, surety, or co-makers shall also constitute unfair debt collection practice,” Padilla said.

A fine of P50,000 shall be imposed for the first offense; P100,000 for the second offense; P500,000 to P1 million and a 90-day suspension of lending and financing activities for the third offense; and the revocation of certificate of authority to operate as an FC or LC for the fourth.

The FCs and LCs shall also disclose to the Securities and Exchange Commission (SEC) and Bangko Sentral ng Pilipinas (BSP) the information on their third-party service providers, including their registered phone numbers used in debt collection.