Lawmakers want to unmask online lenders in debt shaming scheme
Lawmakers are calling for an investigation into online lending companies who use their clients’ personal information to publicly shame them whenever they fail to pay their debts.
Reps. Enrico Pineda and Michael Romero — both from the 1-PACMAN party-list — filed a resolution calling on the appropriate committees to conduct an investigation against the companies for alleged violation of the data privacy law.
“There is a need to examine the processes and machinations being used by these online lending institutions in consideration of the protection of the borrowing public, specifically those entering small-loan agreements, from harassment and unnecessary public debt shaming,” the Nov. 20 resolution read.
The committee on rules would have to see if the issue merits a public hearing. If it does lead to one, the public would have the chance to see the people behind these yet faceless companies supposedly preying on their clients’ fears of losing their reputation.
The National Privacy Commission already began looking into the issue in September. An issue that began with just three companies soon put the spotlight on other players in the industry that also have questionable practices, leading to closures ordered by the Securities and Exchange Commission.
This also prompted FinTechAlliance.ph to institutionalize an industry-wide code of ethics and adopt a code of conduct for responsible lending, as financial technology (fintech) companies with legitimate lending operations seek to distance themselves from the controversy of other industry players.
FinTech Alliance has more than 30 member companies, including big players such as PayMaya and Home Credit.
The group accounted for over 90 percent of fintech-initiated transactions, including lending and payments.
The code of conduct prohibits member companies from using “unlawful threats, intimidation or harassment” to collect unsettled accounts. It also required fintech players to adopt “fair, professional and non-abusive collection practices.”
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