Senator Win Gatchalian urged the Securities and Exchange Commission (SEC) to fast track the creation of a new office that will deal solely on the regulation and monitoring of financing and lending firms and pursue without letting up its crackdown against abusive and illegal lenders.
Branding as laudable the SEC’s efforts as it came ahead of the impending passage of the proposed Financial Products and Services Consumer Protection Act, which Gatchalian co-authored in the Senate, the senator said victims of unfair debt collection practices can now expect prompt action on their complaints against abusive and fraudulent schemes of collection agencies.
“Even in the absence of a law that will give more teeth to the powers of financial regulators to enable them to perform acts necessary for the protection of financial consumers, preparatory works are already being put in place as in the case of the SEC,” the re-electionist senator said, referring to the reported creation of the Financing and Lending Companies Division within the SEC.
Gatchalian could attest to the volume of complainants of various online companies and lending apps as his office received over 20,000 complaints last year from those who have been subjected to grave threats, intimidation, public-shaming and other unfair and abusive debt collection practices.
“Nakarating sa aking kaalaman na may mga biktima ng mga online lending companies na nagawa pang magpatiwakal dala ng kahihiyan at matinding mental stress dulot ng pananakot sa kanilang buhay dahil sa kanilang lumulobong utang. Karamihan sa kanila ay kumapit sa patalim at nangutang sa mga kumpanyang ito sa gitna ng pandemya sa loob ng nakaraang dalawang taon,” he said.
“These incidents clearly necessitate legislative intervention as existing laws would not suffice in bringing justice or at least provide immediate and efficient avenues for redress to consumers,” Gatchalian added.
In addition to administrative sanctions, imprisonment of not less than one year and not more than five years or a fine of P50,000 up to P2 million or both will be slapped against any person who violates the provisions of the bill or any related rules, regulators, orders or instructions issued by the financial regulators.
The proposed penalties are more stringent compared to what is being imposed by the SEC under Memorandum Circular 18 series of 2019, which sets fine ranging from P25,000 to P1 million and suspension or revocation of the certificate of authority to operate as a financing or lending company for those found to have committed abusive, deceptive and unfair collection practices.