A network of digital advocates welcomed House Bill No. 9738 filed by Quezon City 5th District Representative Patrick Michael Vargas, which seeks to strengthen the powers of the Securities and Exchange Commission (SEC) against abusive debt collection practices and rogue online lending applications.
Digital Pinoys National Campaigner Ronald Gustilo said that the proposed Fair Debt Collection and Digital Lending Consumer Protection Act is a welcome step toward protecting consumers from harassment, threats, public shaming and other abusive collection practices.
“We welcome this proposed legislation. Digital lending has made access to credit easier, but it should never become an excuse for abusive and illegal collection practices. The SEC should have the necessary authority to investigate, penalize and stop companies and collection agents that violate the rights of borrowers.”
At the same time, Gustilo reminded consumers that protection from abusive collection practices does not remove their responsibility to pay legitimate debts.
“Consumers deserve protection from abuse, but they also have a responsibility to honor legitimate financial obligations. We need a digital lending environment where lenders collect responsibly and borrowers pay responsibly.”
Gustilo also reminded consumers to practice responsible borrowing by taking out loans only when necessary and making sure that the amount borrowed and the repayment terms are realistic and within their capacity to pay.
“Consumers should borrow responsibly. Before taking out a loan, they should ask whether they really need it, whether they can afford the repayment, and whether the payment schedule is realistic based on their income. Easy access to credit should not mean taking on debt that a borrower cannot reasonably repay. Consumers should also value their credit standing because responsible repayment will allow them to continue accessing legitimate credit services in the future.”