THE Securities and Exchange Commission (SEC) has fined HC Consumer Finance Philippines Inc. for engaging in unfair debt collection practices, including pursuing collection activities at a residence occupied by individuals who were not parties to a loan agreement.
In a June 3 order, the SEC's Financing and Lending Companies Department found the company liable for violating SEC Memorandum Circular 18, Series of 2019, which prohibits unfair debt collection practices, and Memorandum Circular 5, Series of 2023, which implements the Financial Products and Services Consumer Protection Act (FCPA) of 2022.
The regulator imposed a P50,000 fine for the first offense and ordered the company to stop collecting debts from individuals who are neither guarantors nor co-makers of a loan.
The SEC also directed the lender to cease using third-party residences as collection venues, review and revise its collection policies and procedures, and submit a compliance report.
The case stemmed from a complaint filed by a borrower, who alleged that HC Consumer Finance conducted collection activities at a residence occupied by persons who were not guarantors or co-makers to his obligation.
The SEC said the use of a third-party residence as a collection venue created a substantial risk that information regarding a borrower's debt, financial condition or delinquency could be disclosed to persons with no lawful interest in the transaction.
"The totality of the evidence on record establishes that [HC Consumer Finance], under the pretext of enforcing a valid obligation, transgressed the clear and non-waivable boundaries imposed by law on the manner of debt collection," the SEC said.
