The Securities and Exchange Commission wants to penalize lending companies and financing firms that are resorting to unfair debt collection practices.
The SEC said in a draft circular it would penalize lending firms and financing companies using unfair collection practices, including the use or threat of violence and other criminal means, use of insults or profane languages, disclosure of names and other personal information of borrowers and the use of false representation to collect or to attempt to collect any debt from a borrower.
Under the draft rules, lending companies found to have employed abusive, unethical and unfair means to collect debts will be slapped with P25,000 for the first offense and P50,000 for the second offense.
Financing companies will be slapped with P50,000 for the first offense and P100,000 for the second offense.
SEC said that in case of a third offense, it would suspend or revoke the license of erring lending and financing firms.