THE COVID-19 pandemic necessitated long lockdowns and isolation of entire cities, towns and villages, and this has led to job losses, deterioration of household incomes, and the general downturn in economic activities. Now that the public health crisis is well on its 15th month, with only a small portion of the economy reopening, the return of jobs and incomes to many Filipinos is considerably delayed.
Under this situation, many individuals in need are forced to turn for help to lenders of money, whether pawnshops, banks, roving financiers or internet-based. It would have been OK if these lenders are regular businessmen who are contented with just charging the legal interest, and observing the standard practices in collections.
‘There have been reports lately that small debtors who cannot pay because of loss of their jobs are being harassed, threatened and even harmed bodily by men or agents of the lenders, mostly those doing business online.’
There have been reports lately that small debtors who cannot pay because of loss of their jobs are being harassed, threatened and even harmed bodily by men or agents of the lenders, mostly those doing business online. It is also common knowledge that they practice shaming and other abuses not only against the debtors, but also against their relatives, friends and co-workers.
Sen. Sherwin Gatchalian has lately come to the rescue of victims of these unscrupulous financiers by sponsoring a Senate resolution aimed at studying remedial legislation to prevent more incidents of intimidation and abuse. The senator said because of the violent ways of collecting debts, more and more debtors have been victimized, have received death threats, and one or two have committed suicide.
To be fair, concerned government agencies have been doing their share in finding a solution to the problem. The Securities and Exchange Commission revoked last December the certificate of authority of online firm Super Cash Lending after it was found to have engaged in unfair debt collection practices. Meanwhile, the National Privacy Commission last February recommended the prosecution of Fynamics Lending Inc., operator of the PondoPeso online lending app, for harassing and public shaming delinquent borrowers and for violating the data privacy law.
The senator has also sought the enactment of his Fair Debt Collection Practices Act, known now as Senate Bill 1366, which prohibits debt collectors from harassing or threatening the debtor and his or her family with death or physical injuries, inflict harm on the debtor’s reputation or give misleading claims about sanctions against non-payment of debts.
We know and recognize that businesses should be able to collect their cash and other receivables, but their collection practices, specially those that border on harassment and violence, are what the senator is trying to regulate through legislation.
Whenever there is a need to strike a balance between two interests, it is best to be guided by justice and fairness.
