Unethical debt collection practices

(Part 2)

A reader texted me for advice regarding collection problems and asked me if I could discuss in my column certain "unethical collection tactics" being employed or done by some third party collector or collection agencies.

Lately, due to the numerous complaints filed by consumers on the tactics and "unfair" collection practices of independent collection companies which employs several "telecollectors", the Bangko Sentral ng Pilipinas last September 2004 issued CIRCULAR 454 SECTION 7 .... Subsecs. X320.14 and 4301N.14 to read, as follows: Unfair Collection Practices. Banks, subsidiary/affiliate credit card companies, collection agencies, counsels and other agents may resort to all reasonable and legally permissible means to collect amounts due them 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 or untoward acts. Without limiting the general application of the foregoing, the following conduct is a violation of this Subsection: a) the use or threat of violence or other criminal means to harm the physical person, reputation, or property of any person; b) the use of obscenities, insults, or profane language which amount to a criminal act or offense under applicable laws; c) disclosure of the names of credit cardholders who allegedly refuse to pay debts, except as allowed under Subsec. X320.9 and 4301N.9; d) threat to take any action that cannot legally be taken; e) communicating or threat to communicate to any person credit information which is known to be false, including failure to communicate that a debt is being disputed; f) any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a cardholder; and g) making contact at unreasonable/inconvenient times or hours which shall be defined as contact before 6:00 A.M. or after 10:00 P.M., unless the account is past due for more than sixty (60) days or the cardholder has given express permission or said times are the only reasonable or convenient opportunities for contact.

In short, bad debt collectors may not make threats of violence, use obscene language, make harassing telephone calls or calls at times known to be inconvenient, impersonate government officials or attorneys, misrepresent a consumer's legal right, collect more than what is legally due, misuse postdated checks. Furthermore, third party collectors also are prohibited from discussing your debt with third parties such as a neighbor, friend or associates.

SEMINAR INVITATION: CIBI will have a SEMINAR on MANAGING A COLLECTION ORGANIZATION, on June 16, 2006 at Cebu Midtown Hotel. Interested participants can call 412-2248/ 2310-480. Look for Jaja Duran .

Editor's Note: Mr. Ed F. Limtingco, is the VisMin Manager of CIBI Information, Inc., a business information and receivables management company. He can be reached at 0917-7220521 or at [email protected]