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DOES one of your New Year resolutions concern getting out of credit card debt and getting those insistent and constant calls from collection agencies out of your life?

The BSP’s Financial Consumer Affairs Group (FCAG), in its Weekly Wealth Watch e-leaflet, has answered common consumer inquiries on the legal liabilities of cardholders for nonpayment of credit card debts and regulations concerning collecting agencies.

The following issues, as explained by the FCAG, will enable you to learn about your rights as a consumer and help you know what to do when you find yourself in a credit card-related quagmire.

• Can you go to jail or get sued for credit card debt?

A civil action for collection of sum of money may be filed by the credit card issuer for non-payment after the credit card debt becomes “due and demandable.”

According to the FCAG, this is not punishable by imprisonment.

However, there is a possibility of the “attachment of your properties” to satisfy the amount claimed by the credit card issuer.

It should be noted that a criminal case may be filed against the cardholder for committing prohibited acts under Republic Act No. 8484, otherwise known as the Access Devices Regulation Act of 1998.

Such illegal acts include obtaining money or anything of value through the use of an access device, with intent to defraud or with intent to gain, and fleeing thereafter (as provided under Section 9 of the law).

There is presumption and prima facie evidence to have utilized the credit card with intent to defraud under Section 14 of R.A. No. 8484 if a cardholder abandons or secretly leaves the place of employment, business or residence stated in the cardholder’s application or credit card, without informing the credit card company of the place where he or she could actually be found or contacted — if at the time of such abandonment or “surreptitious leaving,” the outstanding and unpaid balance is past due for at least ninety (90) days and is more than P10,000.

• Can people from collecting agencies go to your house?

What can you do when they do this?

There is no law or regulation banning collecting agents to go to the house of the cardholder, according to the FCAG.

Collection agents may resort to all reasonable and legally permissible means to collect from the cardholder the amount due under the credit card agreement, provided that in the exercise of their rights and performance of duties, they must observe good faith and reasonable conduct and refrain from engaging in unscrupulous and untoward acts.

Subsection X320.14 of the BSP’s Manual of Regulations for Banks (MORB) lists possible unfair collection practices by these agencies.

Section 4 of BSP Circular No. 702, Series of 2010 also requires that banks/quasi-banks and their subsidiary/affiliate credit card companies inform their cardholders in writing of the endorsement of the collection of their account to a collection agency/agent, or the endorsement of their account from one collection agency/agent to another, at least seven (7) days prior to the actual endorsement.

The notification shall include the full name of the collection agency and its contact details.

You can access these regulations through these links:

http://www.bsp.gov.ph/downloads/Regulations/MORB.pdf

http://www.bsp.gov.ph/downloads/regulations/attachments/2010/c702.pdf

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