SEC Fines Home Credit for Unfair Debt Collection

The Securities and Exchange Commission (SEC) has fined HC Consumer Finance Philippines, Inc. for engaging in unfair debt collection practices.

In an order dated June 3, the SEC Financing and Lending Companies Department found HC Consumer Finance liable for violation of SEC Memorandum Circular (MC) No. 18, Series of 2019 (MC 18), which prohibits unfair debt collection practices, and MC No. 5, Series of 2023, or the SEC Rules and Regulations of the Financial Products and Services Consumer Protection Act (FCPA) of 2022.

Included in the list of unfair debt collection practices under MC 18 is the contacting of persons in the borrower’s contact list other than those named as guarantors or co-makers. The same act is considered an abusive debt recovery practice under MC 5.

“The use of a third-party residence as a collection venue necessarily creates a substantial risk that the existence of the debt, the borrower’s financial condition, or the fact of delinquency will become known to persons who have no lawful interest in the transaction. Such exposure is precisely what the FCPA, MC 18, and MC 5 seek to prevent,” the order read.

Read more: https://www.sec.gov.ph/uncategorized/sec-fines-hc-consumer-finance-for-unfair-debt-collection/

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