Concerned that violations of debtor’s rights to privacy and unfair debt collection practices are becoming prevalent, Davao City First District Representative Paolo Duterte and Benguet Representative Eric Yap filed a bill seeking to stop the malpractices and protect both the debtor and the creditor.

House Bill 6681 or the Fair Debt Collection Practices Act seeks to regulate debt collection practices of debt collectors to protect borrowers from abuses, harassment, unfair treatment and misrepresentations and to also ensure that debt collectors would not be disadvantaged.

“The proposed measure aims to prohibit and eliminate the use of abusive, deceptive and unfair debt collection practices by debt collectors and to ensure that those debt collectors who refrain from using abusive collection practices are not competitively disadvantaged,” Duterte said.

Duterte added that online lending collections, particularly online lending sharks, became rampant following crackdown on unregistered lending agencies, unfair debt collection practices, and cyber harassment.

Meanwhile, Yap said that the Department of Justice even highlighted the following acts to be violative of the debtor’s rights — accessing the debtor’s phone book/contact list for purposes of sending them messages in the event of untimely and/or non-payment; posting debtor’s personal and sensitive personal information online for purposes of shaming them; threatening debtor with debt and physical injuries if they fail to settle their account balances; and using profane languages through messages directly sent to the debtor and the debtor’s references for the purpose of shaming them.

“But most importantly, these lending agencies also charge exorbitant interest rates that are unreasonable to the creditors,” Yap said.

The proposed measure also stipulates that financing companies, lending companies, online financing or lending applications, credit card companies, creditors, debt collectors and third party service providers engaged by creditors may resort to all reasonable and legally permissible means to collect amounts due them under the loan agreement, provided that in the exercise of their rights and performance of their duties – “they must observe good faith and reasonable conduct, and refrain from engaging in abusive, unfair, and untoward acts.”