Cops warned: Don’t use ATMs as loan collateral

CEBU, Philippines — The Police Regional Office (PRO) in Central Visayas has called on cops not to use their ATM (automated teller machine) cards as collateral for quick and easy loans from informal lenders or loan sharks.

Chief Superintendent Debold Sinas, director of PRO-7, also directed cops to bring their ATMs every Monday to ensure their cards are with them.

Those who failed to show their ATMs will face appropriate sanctions, he said.

Sinas made the order following reports that most police officers are using their cards as collateral with the loan sharks.

“They should bring their ATMs every Monday. That’s an order. I will not buy it if they will reason out that their ATMs are with their wives,” he said.

He said cops need to properly manage their finances, adding that those with debts were found inefficient in their jobs.

Others would resort to illegal activities in order to pay off their debts and sustain lifestyle.

During his command visit in Daanbantayan in northern Cebu, Sinas said two cops admitted that their ATMs are with the lenders.

Sinas said appropriate sanctions will be imposed by the Philippine National Police against erring lending financial institutions.

Bangko Sentral ng Pilipinas (BSP), in its 2014 Consumer Finance Survey, said 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.

“The BSP urged the public to stop “Sangla ATM” schemes wherein borrowers use ATM cards to secure a loan,” read BSP’s recent public advisory.

The central bank said the loan sharks are not authorized by any government agency, so there is limited mechanism for a card holder to file complaints or request for restoration of losses

It 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.

According to the BSP, the scheme could also expose the borrowers to identity theft. (FREEMAN)