By Dolly Palisada
YOU are a credit card defaulter. Your credit card debt has blown out of proportion. The amount is so huge you can no longer pay it in full. A few months after, a credit card collector comes knocking at your door, harassing you, threatening to sue you or try pulling out your properties to settle your account.
In the Philippines, you hear horror stories of harassment and intimidation by credit card collectors. To equip yourself with basic information of your rights, here are several useful pointers that you may use in a likely scenario:
1. You have the right to ask the debt collector a copy of your Statement of Account (SOA) duly signed by the bank. A demand letter or an offer letter showing a discounted rate of your debt is not your SOA. If they provide you an SOA, make sure to verify it with the bank for its authenticity. Make your request clear or adopt a mantra: No SOA, No Pay.
2. You have the right to decide on how much you can afford to pay your debt. Do this by sending a proposal letter through email or the post office for your proposed mode of repayment and it should be according to your financial capacity.
3. Once you confirm agreement, it should be officially written (never a verbal one). A written proof is what you need in case they deny your payments.
4. In case of disagreement in the proposal, then don’t pay. Challenge the collecting agency to pursue the case in court where it is handled properly. It should be noted that credit card debt, done in good faith (such as bankruptcy, unemployment, etc) is not a criminal act but a simple case of breach of contract therefore constitute a civil case. Credit card debt eventually turns into criminal act at the issuance of bouncing checks (estafa) or was stolen and used by another person.
5. In some cases, collecting agencies may use police presence as shock factor to knock at your door: will dangle a piece of paper in your face as “warrant of arrest” but will not allow you to read it. These are one of the many ploys to pressure you out of your wits to pay your debt. Don’t panic. Instead, get their names, their precinct and their car’s plate number. You may also take a picture of their faces through your phone camera or press start a video. Again, be wary that this is not the job of policemen, barangay captains or kagawads. File a complaint or case against them for abuse of authority if they keep on harassing you.
6. Credit card collection agencies will use guises and disguises for the sole purpose of collecting money from you. Commonly used are “LBC uniformed men” to enter your home by announcing a package delivery. Once you allow them to enter the house, they will reveal their true identity and will try by all means to purge money from you or pull-out appliances at your house to swap for your debt. At times they will claim to be the sheriff of the court and extort money from you. Be vigilant and tell them to go or you file a criminal case against them for trespassing, extortion or unjust vexation.
7. Some initial pressures used by credit card collectors are in the form of text messages or persistent calls. Messages may say you have a pending warrant of arrest or will contain details of court case number, name of the judge, branch of court and time of hearing. The purpose of this is to sow panic and fear. However, a text message containing information of an impending warrant of arrest is a give away. A proper court will not issue such nonsense. Warrant of arrest is for criminal cases and credit card debt is a civil issue. It should be noted that warrant of arrests are personally delivered by court authorities by surprise and not over the phone or texts messages, fax or email messages.
8. What is RA 8484? Most often, this republic act is used by collecting agents to intimidate defaulters. In essence, Republic Act 8484 is also known as the Access Devices Regulation Act of 1998. In layman’s language, an access device means any card, plate, code, account number, electronic serial number, personal identification number and other telecommunication services, equipment or instrumentalities-identifier or other means of account access that can be used to obtain money, goods, services or any other thing of value to initiate a transfer of funds. RA 8484 is also applicable to person/persons who applied for a credit card using fake identity/identities which is classified as a fraudulent act and has nothing to do with your credit card debt or non-payment of debt.
9. Having said all that, it is worth mentioning as well that credit card defaulters can still travel abroad. Do not believe if collectors will threaten to file a hold departure order against you because it’s merely a bluff. For those getting an NBI clearance for work or other purposes, don’t believe in hearsay that you cannot get your clearance despite your standing debt. Take note that NBI records reveal criminal cases only and not civil cases.
Are credit card debt collectors telling lies? Yes. It’s their modus operandi to put pressure on the defaulter to collect money. We know they are only doing their jobs but a defaulter has rights as well to protect themselves from such harassments. Collecting agencies are paid for by the banks to collect debts. For as long as you’re not running away from your responsibilities, or you’re not in hiding, then move on with life and learn a great deal from the experience.