THE Senate approved on third and final reading Senate Bill 1744, which aims to protect borrowers from abusive and deceptive debt collection practices while allowing creditors to recover legitimate debts through lawful means.
Sen. Bong Go, co-author and co-sponsor of the measure, voted in favor of the bill during the Senate plenary session Monday, saying the proposed legislation seeks to establish clearer rules governing the conduct of creditors, financing companies, and lending firms in collecting debts.
The bill prohibits harassment, intimidation, and other oppressive or abusive conduct by debt collectors. Lawmakers said the measure was crafted in response to growing complaints about unethical collection methods, including public shaming, repeated threatening messages, and other forms of coercion used against borrowers.
Under the proposed law, lenders and collection agencies would be barred from engaging in deceptive practices or using intimidation to pressure borrowers into settling debts.
The measure also contains provisions governing the acquisition of location information of debtors. Debt collectors who contact individuals other than the borrower to locate the debtor must ensure that the collection and use of personal data are done in compliance with existing privacy and consumer protection laws.
Despite the restrictions, the bill recognizes the right of creditors to recover legitimate debts. It states that lenders and collection agencies may still use all reasonable and lawful means to collect payments, provided their actions remain within legal and ethical boundaries.
Go said the proposed law aims to strike a balance between consumer protection and the rights of lenders, ensuring that borrowers are shielded from abuse while legitimate financial institutions can continue their operations.
The measure also clarifies that protections under the bill apply to debtors acting in good faith, preventing potential abuse of the law by borrowers who deliberately evade payment.
The proposal complements the consumer safeguards provided under Republic Act 11765, which strengthened oversight of financial service providers and established stronger protection mechanisms for consumers availing of financial products and services.
