Loan sharks: Inconveniencing ATM cardholders

Absolutely, everyone deserves a good life. However, what is good for one may not be at all acceptable for most of us. After all, we are all filled with biases and have varying degrees of satisfaction.

For instance, while a few of us marvel at the opportunities of working abroad others are content with landing at stable jobs locally. On the other hand, while some of our less fortunate brothers are fighting for lots to till, others are just sitting on their ass waiting for the manna to fall. These varying actuations from the same sector, as usual, in the name of poverty.

However, while an OFW and his family may squander a lot; the rank and file employee may just barely meet both ends; and the impoverished may gladly embrace the government’s 4Ps (or Pantawid Pamilyang Pilipino Program) program, the fact remains that they all have one thing, possibly, in common. They all have ATM (automated teller machine) cards. The OFW for his remittances, the rank and file employee for his bi-monthly wages and the 4Ps beneficiary for his conditional cash transfer.

While these individuals may have varying amounts of deposits or credits to their ATM accounts each month, there is still a big possibility that they have another thing in common. Their ATM cards are used as collateral with the loan sharks.  Yes, you read it right, with the loan sharks.

This fact is confirmed by the Bangko Sentral ng Pilipinas (BSP) in its 2014 Consumer Finance Survey. Notably, it showed that 39.9 percent of Filipinos use their ATM cards as loan collateral wherein borrowers surrender their cards and share their PIN and other account information with informal lenders or loan sharks.

Now that it has become so rampant, BSP recently “reminded the public not to use their ATM cards as collateral for quick and easy loans from informal lenders or loan sharks.” In a public advisory, it added that “the BSP urged the public to stop “Sangla ATM” schemes wherein borrowers use ATM cards to secure a loan.”

It further advised the public “not to entrust the cards as well as the personal identification number to creditors.” It also added that “creditors could withdraw more from the ATM account than the agreed loan amortization and could commit other abuses since there is no formal loan contract.”

“They are not authorized by any government agency, so there is limited mechanism for you to file complaints or request for restoration of losses,” the central bank added.  According to the BSP, the scheme could expose the borrowers to identity theft as well as unauthorized withdrawal from their ATM accounts after entrusting their PIN to the creditors.

Out of these information and advisories, what is singularly alarming is the reported 39.9 percent of Filipinos using their ATM cards as collateral for a loan. This humongous percentage is, definitely, not contributed largely by the OFWs because their number is very much less than that. Rank and file employees? Maybe. Dissecting it further, however, the possibility is high that the majority of those participating in these “Sangla ATM” schemes are 4Ps beneficiaries.

Today, as honest and hardworking taxpayers continue to give their own share, we can’t help it but look into this program’s implementation. As we all now know, even from the very start, though we tried to help free them from bondage, some of the program’s beneficiaries were still into their usual hopeless selves. They were using their ATM cards as collateral for loans obtained from usurious lenders (loan sharks or 5-6 lenders).

Definitely, these loans are obtained for purposes other than those prescribed by the program. Today, these loan sharks are raking in no less than 10% of these beneficiaries’ monthly stipend.  Considering that the program runs into billions, even those who claim they are poor in numbers can do their math and know how much these loan sharks have slashed.

Worse, and, probably, the BSP is not aware of it. These loan sharks are staying in ATM booths longer than necessary as they carry with them, maybe, fifty 50 or a hundred ATM cards. So that, the hardworking taxpayers (also, ATM cardholders) who are honest contributors to the 4Ps program, are so inconvenienced in long queues caused by these loan sharks.