Strengthening the Unfair Collection Practices Law: A Call for Legislative Action
The Unfair Collection Practices Law and Memorandum Circular No. 18, Series of 2019 were enacted to protect borrowers from abusive, unethical, and excessive debt collection tactics. However, the current legal framework remains insufficient in shielding credit card borrowers, bank borrowers, and other debtors from relentless harassment by collection agencies. It is crucial for lawmakers and Congress to strengthen existing regulations and introduce stricter penalties against financial institutions and collection agencies that engage in aggressive collection practices. Borrowers who are unable to pay their debts are not criminals—they are individuals struggling with financial hardships due to job loss, insufficient income, or economic downturns. Most borrowers do not intend to evade their obligations; they simply lack the means to settle their debts. Thus, the law must recognize their situation and offer a fair and humane approach to debt collection.
Once an account is endorsed to a collection agency, borrowers often face extreme psychological distress due to constant harassment via calls, SMS, and even social media messages. Collection agencies bombard them with reminders almost every minute, sometimes calling late at night or early in the morning, disrupting their peace of mind and daily lives. Instead of helping them find solutions, these collection agencies worsen their mental and emotional struggles, pushing them further into despair. Strengthening the Unfair Collection Practices Law should include provisions that prohibit excessive and intrusive collection methods, set strict time limits for collection calls, and impose harsher penalties on agencies that violate these regulations. Additionally, the law should establish alternative payment options and restructuring programs that will allow borrowers to gradually settle their debts without fear of harassment.
For unemployed borrowers actively seeking jobs, constant calls from collection agencies prevent them from securing employment. Many job applicants anticipate calls from potential employers, hoping for an interview or a job offer. However, when their phones ring every three minutes due to debt collection calls, they are unable to distinguish between legitimate job-related calls and collection harassment. This unethical practice not only prevents them from finding work but also prolongs their inability to pay their debts. Congress should pass a law that regulates the frequency of collection calls, ensuring that borrowers have the space and opportunity to recover financially without being overwhelmed by excessive communication from lenders and collection agencies.
Additionally, once a borrower fails to pay a loan, their credit score is ruined, making it impossible to obtain future financing. Worse, their name is reported to the Credit Management Association of the Philippines (CMAP) and other financial institutions, effectively blacklisting them from the financial system. This practice leaves borrowers with no chance to apply for a new loan, start a business, or regain financial stability. Instead of permanently destroying a borrower’s financial reputation, lawmakers should introduce credit rehabilitation programs that allow debtors to gradually restore their creditworthiness. The new law should mandate financial institutions to provide debt recovery programs, temporary credit relief, and financial literacy training, helping borrowers bounce back from financial difficulties rather than being permanently excluded from the banking system.
We urge Congress to take immediate action by strengthening the Unfair Collection Practices Law and passing a bill that prevents harassment, excessive collection practices, and unfair blacklisting of borrowers. The goal of the law should not be to punish people for being financially burdened, but rather to provide them with the necessary support to recover, rebuild their credit, and reintegrate into the financial system. By enacting humane debt collection policies, Congress can protect the rights of borrowers while still ensuring financial institutions receive fair repayment through ethical and regulated means. Let us create a fairer, more compassionate financial system—one that acknowledges the realities of economic struggles while upholding ethical lending and collection practices.
Hiling sa Kongreso: Palakasin ang Batas Laban sa Hindi Makatarungang Pagsingil ng Utang
Ikaw ba ay may utang sa bangko o credit card? Hindi ka kriminal dahil lang sa hindi mo pa nababayaran ang iyong utang. Maraming Pilipino ang nalulubog sa utang hindi dahil sa kapabayaan kundi dahil sa kawalan ng sapat na kita at kakulangan ng oportunidad sa trabaho. Ang ibang nangutang ay nais bayaran ang kanilang obligasyon ngunit sa sobrang taas ng interes at bigat ng singil, hindi nila ito kayang habulin. Sa kabila ng kanilang pagsisikap, patuloy silang hinahabol ng bangko at lending institutions, na tila ba wala nang bukas para sa kanila.
Kapag ang isang account ay na-endorso na sa collection agencies, nagsisimula ang mas matinding paghihirap ng isang nangungutang. Araw-araw, paulit-ulit silang nakakatanggap ng SMS na may pananakot, at halos walang tigil ang tawag mula sa mga ahente ng koleksyon—minsan, kahit dis-oras ng gabi o madaling araw. Ang ganitong klase ng harassment ay hindi makatarungan at nagdadala lamang ng matinding stress sa mga nangungutang na sa halip na makahanap ng solusyon, lalo pang nalulugmok sa problema.
Isipin natin ang isang taong walang trabaho at pilit naghahanap ng mapapasukan. Nagpapadala siya ng aplikasyon sa iba’t ibang kumpanya at buong pag-asang hinihintay ang tawag ng employer. Subalit sa halip na tawag mula sa kumpanyang kanyang inaasahan, puro tawag ng collection agency ang natatanggap niya, halos bawat tatlong minuto! Paano makakahanap ng trabaho ang isang taong patuloy na inaabala ng ganitong klase ng panggigipit? Ang mas masakit pa, wala siyang kahit anong pagkakakitaan upang mabayaran ang kanyang utang.
Bukod pa rito, ang pangalan ng hindi nakabayad ay agad na inilalagay sa blacklist at ipinapasa sa lahat ng bangko at lending institutions. Nangangahulugan ito na kahit gusto niyang mangutang muli upang magsimula ng negosyo at bumangon, wala na siyang pagkakataon. Ang kanyang credit score ay winasak, at wala na siyang access sa kahit anong pondo na maaaring makatulong sa kanya upang muling makabangon. Ang ganitong sistema ay hindi patas at lalong nagpapahirap sa mga Pilipinong nais makaalpas sa utang.
Dahil dito, hinihiling natin sa Kongreso na magpasa ng batas na magpapalakas sa Unfair Collection Practices Law o sa Memorandum Circular No. 18, Series of 2019. Dapat magkaroon ng proteksyon ang mga nangungutang laban sa pang-aabuso ng mga bangko at collection agencies. Hindi dapat masira ang pangalan ng isang tao dahil lang sa kakulangan niya ng pera sa isang tiyak na panahon. Ang mas makatarungan ay bigyan sila ng pagkakataong makabayad sa isang sistema na hindi nang-aapi, hindi naninira, at hindi nagdadagdag ng pasanin sa halip na makatulong.
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