other currency conversion charges and costs arising from the
purchase by the card company of foreign currency to settle the
customers transactions.
Subsection X320.8, MORB; Subsections 4301N.8 and
4320Q.8, MORNBFI, provide that the card issuer and the
cardholder may, prior to the consummation of the transaction,
agree in writing to a deferral of all or part of one or more unpaid
installments, and the bank may collect a deferral charge which
shall not exceed the rate previously disclosed pursuant to the
provision on disclosure.
Subsection X320.9, MORB; Subsections 4301N.9 and
4320Q.9, MORNBFI, require that:
no late payment or penalty shall be collected unless
collection thereof is fully disclosed in the contract between
the issuer and the cardholder;
late payment or penalty fees may be based on the unpaid
minimum amount due or a prescribed minimum fixed
amount; and
said late payment or penalty fees may be based on the total
outstanding balance of the credit card obligation, including
amounts payable under installment terms or deferred
payment schemes, if the contract between the issuer and
the cardholder contains acceleration clause.
Subsection X320.10, MORB; Subsections 4301N.10 and
4320Q.10, MORNBFI, require credit card companies to retain
confidentiality of information of cardholder except under the
following circumstances:
disclosure of information is with the consent of the
cardholder;
release, submission or exchange of customer information
with other financial institutions, credit information bureaus,
credit card issuers, their subsidiaries and affiliates;
upon orders of a court of competent jurisdiction or any
government office or agency authorized by law, or under
such conditions as may be prescribed by the Monetary
Board;
disclosure to collection agencies, counsels, and other
agents of the bank or card company to enforce its rights
against the cardholder;
disclosure to third party service providers solely for the
purpose of assisting or rendering services to the bank
or card company in the administration of its credit card
business; and
disclosure to third parties such as insurance companies,
solely for the purpose of insuring the bank from cardholder
default or other credit loss, and the cardholder from fraud
or unauthorized charges.
Subsection X320.11, MORB; Subsections 4301N.11 and
4320Q.11, MORNBFI, require card issuers to include in their
contract with cardholders a provision authorizing the issuer to
suspend or terminate the effectivity of the right to use the card, if
circumstances warrant.
Subsection X320.13, MORB; Subsections 4301N.13 and
4337Q.13, MORNBFI, require the credit card issuer to inform/
notify the cardholder in the agreement, contract or any equivalent
document governing the issuance or use of the credit card that,
pursuant to the provisions of Articles 1278 to 1290 of the New
Civil Code of the Philippines, as amended, the use of credit
card will subject his/her deposit/s with the bank to offset
against any amount/s due and payable on his/her credit
card which have not been paid in accordance with the
terms of the agreement/contract.
Developed by the Financial Literacy and Advocacy Division
Financial Consumer Protection Department
contact information
Financial Consumer Protection Department
Supervision and Examination Sector
Bangko Sentral ng Pilipinas
5th Floor Multi-storey Building
BSP Complex, A. Mabini St., Malate
1004 Manila
Telephone Numbers:
Trunk Line : (02) 708-7701 local no. 2584
Direct Line: (02) 708-7087
Email Address: consumeraffairs@bsp.gov.ph
Financial Education: Building Block for a Stronger Economy
are you having difficulties in paying
your credit card debt?
If you find that you are in trouble paying your credit card bills,
contact your credit card company immediately. Try to work out a
modified payment plan that reduces your payables to a more
manageable level. Non-payment of credit card bills will not only
result to penalties and surcharges, but will also be reflected on your
credit history. This credit history reflects your credit activity and
payment performance on any credit account youve had in the past
and a good credit reputation will ensure ease of approval of future
loan applications. Dont wait until your accounts are turned over
to a collecting agent. In the event that your account gets turned
over to a collection agency, it helps to know that Bangko Sentral
ng Pilipinas (BSP) regulations on Unfair Collection Practices
require that credit collection agencies treat your fairly and
prohibit certain methods of debt collection. Specifically, Section
X320.15 of the Manual of Regulations for Banks (MORB), provides
that subsidiary/affiliate credit card companies, collection agencies,
counsels, and other agents may resort to all reasonable and
legally permissible means to collect amounts due them under the
credit card agreement. However, in the exercise of their rights and
performance of duties, they must observe good faith, reasonable
conduct and refrain from engaging in unscrupulous or untoward
acts. The following are considered as violations of this regulation:
Use of threat of violence or other criminal means to
harm the physical person, reputation, or property of any
person;
Use of obscenities, insults or profane language which
amount to a criminal act under applicable laws;
Disclosure of the names of credit cardholders who
allegedly refuse to pay debts;
Threat to take any action that cannot legally be taken;
Communicating or threat to communicate to any person
false credit information, including failure to communicate
that a debt is being disputed;
False representation or deceptive means to collect any
debt or to obtain information concerning a cardholder; or
Contacting the cardholder at unreasonable/inconvenient
times, i.e., before 6:00 a.m. or after 10:00 p.m., unless
the credit cardholder has given permission to do so, or
account is past due for more than sixty (60) days.
In addition, Section X320.15 requires that banks and their
subsidiary/affiliate credit card companies shall inform their
cardholder in writing of the endorsement of the collection of their
account to a collection agency/agent, or the endorsement of their
account from one (1) collection agency/agent to another, at least
seven (7) days prior to the actual endorsement. The notification
shall include the full name of the collection agency and its contact
details. (As amended by Circular No. 754 dated 17 April 2012)
Other laws, rules and regulations on credit cards include the
following:
R.A. No. 8484 (Access Devices Regulation Act) dated
11 February 1998
Section 4 requires that, any application to open a credit card
account for any person under an open-end credit plan or a solicitation
to open such an account, either by mail, telephone or other means,
shall disclose the following information in writing or orally, as the
case may be:
the annual percentage rate (APR);
the amount of any annual fees and other fees;
a detailed explanation of method used in determining the
balance upon which the finance charge is computed; and
any fee imposed for an extension of credit in the form of cash.
Section 14 states that a cardholder who abandons or
surreptitiously leaves his/her residence, place of business or
employment as stated in his/her credit card application, without
informing the bank or credit card company where he/she could
be actually contacted, and if at the time of such abandonment or
surreptitious leaving, the outstanding and unpaid balance is past due
for at least ninety (90) days and is more than Ten thousand pesos
(10,000), shall be prima facie presumed to have used his/her
credit card with intent to defraud.
Manual of Regulations for Banks (MORB) and Manual of
Regulations for Non-Bank Financial Institutions (MORNBFI)
Subsection X320.4 of MORB; Subsections 4301N.4 and
4320Q.4 of MORNBFI require disclosure of the following items:
the finance charges, individually itemized, which are paid or to
be paid by the cardholder;
non-finance charges, individually itemized, which are paid
or to be paid by the cardholder in connection with the
transaction but which are not incident to the extension of
credit;
percentage that the finance charge bears to the total
amount to be financed expressed as a simple annual rate,
as the case may be, on the outstanding balance of the
obligation;
effective interest rate per annum;
for installment loans, the number of installments,
amortization schedules;
the default, late payment/penalty fees or similar
delinquency-related charges payable in the event of late
payments;
the conditions under which interest may be imposed,
including the time period, within which any credit extended
may be repaid without interest;
the method of determining the balance upon which interest
and/or delinquency charges may be imposed;
the method of determining the amount of interest and/
or delinquency charges, including any minimum or fixed
amount imposed as interest and/or delinquency charge;
where one or more periodic rates may be used to compute
interest, each such rate, the range of balances to which it
is applicable, and the corresponding simple annual rate;
other fees, such as membership/renewal fees, processing
fees, collection fees, credit investigation fees and attorneys
fees; and
for transactions made in foreign currencies and/or outside
the Philippines, for dual currency accounts (pesos and dollar
billings), as well as payments made by credit cardholders in
any currency other than billing currency:
the application of payments;
the manner of conversion from the transaction
currency and payment currency to Philippine pesos or
billing currency;
definition or general description of verifiable blended
exchange/conversion rates (e.g., MasterCard or VISA
International rates on the date the item was processed/
posted to the billing statement, plus mark-up, if any)
including conversion commission; and/or