THE central bank said on Wednesday the authority of collection agents to collect credit card debts was limited to specific guidelines approved by the credit card issuer.
“This is in response to the complaints and inquiries received by the BSP’s (Bangko Sentral ng Pilipinas) Financial Consumer Protection Department involving credit card debt restructuring,” the bank said
It said in a public advisory collection agents often re-structure the debts, which result to complaints of alleged unfair collection practices due to lack of awareness of cardholders on the extent of authority of collection agents.
Collection agents offer cardholders terms of payment, which are inconsistent with the terms of payment approved by the credit card issuer, the bank said.
“It is also a common practice among external collection agencies to pressure credit card holders to pay any amount, just to enforce collection, notwithstanding that the amount has not yet been approved by the credit card issuer,” the BSP said.
It said a collection agent is authorized to negotiate for repayment schemes based only on specific guidelines set by the credit card issuer.
A repayment scheme must be supported by a Conforme Letter and/or a Promissory Note signed by the credit card issuer and the cardholder, the bank said.
It said it is not necessary for a credit cardholder to pay any amount prior to negotiation of a repayment scheme.