By Tracy Cabrera
MANILA — The Securities and Exchange Commission (SEC) has ordered Home Credit (HC) Consumer Finance Philippines to pay a P50,000 fine due to a complaint for unfair debt collection practices.
According to the SEC, a borrower complained that the consumer finance firm conducted collection activities at a third-party residence occupied by individuals who are not guarantors or co-makers in the complainant’s loan obligation.
Despite this, the complainant alleged that HC Finance continued its collection activities at the same residence despite a written objection from the borrower.
In its order dated June 3, the SEC Financing and Lending Companies Department found HC liable for violation of SEC Memorandum Circular (MC) No. 18, Series of 2019 (MC 18), which prohibits unfair debt collection practices, and MC No. 5, Series of 2023, or the SEC Rules and Regulations of the Financial Products and Services Consumer Protection Act (FCPA) of 2022.
Included in the list of unfair debt collection practices under MC 18 is the contacting of persons in the borrower’s contact list other than those named as guarantors or co-makers.
SEC asserted that the act is considered an abusive debt recovery practice.
“The use of a third-party residence as a collection venue necessarily creates a substantial risk that the existence of the debt, the borrower’s financial condition, or the fact of delinquency will become known to persons who have no lawful interest in the transaction. Such exposure is precisely what the FCPA, MC 18, and MC 5 seek to prevent,” it noted.
“The totality of the evidence on record establishes that (HC Consumer Finance), under the pretext of enforcing a valid obligation, transgressed the Page 1 of 2 clear and non-waivable boundaries imposed by law on the manner of debt collection,” it added.
Aside from the P50,000 penalty, HC Finance was likewise ordered to stop collecting debts from individuals who are neither guarantors nor co-makers in a loan.
SEC also directed the company to review and revise its collection policies and procedures and submit a compliance report to the Commission.
ia/xf
