Credit card rules tightened
MANILA – The Bangko Sentral ng Pilipinas (BSP) has ruled against issuance of pre-approved credit cards and now directs credit card companies to inform clients before their accounts are endorsed to collection agencies.
These are among the amendments approved by central bank’s policy-making Monetary Board (MB) recently to further protect credit card holders.
Under the new rules, BSP said issuance of pre-approved credit cards will be stopped citing “cards sent either through the mail or delivered by courier have exposed the public to cases of fraud via unauthorized use of said cards.”
Also, credit card companies are now required to notify their clients in writing seven days in advance before the latter’s account is endorsed to a collection agency.
“The notification requirement, which should include the full name of the collection agency and its contact details, is expected to also give cardholders enough time to consider whether it will be advantageous for them to settle before their accounts are endorsed to collection agents,” the BSP said.
The central bank also direct credit card companies to disclose true identity of their collection agents “to address mounting complaints regarding unfair collection practices by some collection agents.”
Another issue that the MB took into consideration is the disclosure requirements wherein credit card issuers are now required “to print using the minimum Arial 12 theme font size, a table of the applicable fees, penalties and interest rates on credit card transactions.”
A table containing the list of these items should now be “included in all marketing materials and in the billing statements and shall include the manner of and reason for the imposition of such penalties, fees and applicable conversion reference rates for third currency transactions.”
Credit card holders would now be “constantly reminded” through their billing statements that paying only the minimum amount due or any amount less than the total amount in a particular billing cycle “would automatically mean the imposition of interest and other charges.”
BSP also reminds credit card companies regarding the Consumer Act of the Philippines otherwise known as Republic Act 7394, which states that consumer shall pay the same amount for any purchases whether it is paid by cash or through a credit card.
It also cited the Access Devices Regulation Act (Republic Act 8484), which on the other hand, “defines the liabilities of credit card holders when credit cards are stolen, among others.”
It added that the new regulations “apply not only to credit cards but extend to other lending operations of all BSP-supervised institutions, other than pawnshops.”*PNA
