Solon seeks regulation of credit card charges

Overcharged and harassed credit card users might soon find relief from abusive card issuers. Though a tyro, Quezon City Rep. Winston Castelo is taking up the cudgels for them against big banks and government coddlers.

Castelo is urging the House committee on banks to look into prickly interests, penalties and other charges being slapped cardholders. “If there are perceived abuses by banks and credit card companies, the same must be within regulation of the State,” Castelo points out.

In his resolution, Castelo notes: “Agreements between card issuers and users must be reviewed from time to time through appropriate circulars, with the end in view of avoiding cases of rather unconscionable, iniquitous, excessive or exorbitant interests, penalties, fees or charges, especially in most common forms of defaults in payments”.

Card users have been decrying in the media sky-high interests and penalties of 3.5 percent to even 530 percent per month. Most complainants want senators and congressmen to initiate action against the banks and affiliated credit card issuers.

The Supreme Court ruled in September 2009 that interest and penalty beyond one percent each a month is “exorbitant, iniquitous, excessive.” (See http://sc.judiciary.gov.ph/jurisprudence/2009/september2009/175490.htm) The case stemmed from a collection case filed by a bank in lower courts against a cardholder.

The Bangko Sentral ng Pilipinas and its policy-making Monetary Board have been largely mum about the ruling, the SC’s fourth against usurious card rates and more than tenth against bank abuses. Whenever pressed for its stand, the BSP-MB claims that the issue of interest and penalty rates is case-to-case, and that the ruling pertains to the sued card user, not to issuers in general. If a cardholder complains to the Dept. of Trade and Industry, he is referred to the evasive BSP-MB, completing the runaround given to consumers. (A reader who sought SC clarification of the BSP-MB interpretation was advised to go see a lawyer.)

If Castelo’s inquiry prospers, his aim could come true: “There must be well-circulated rules and regulations governing credit card operations.”

Ted Failon and Pinky Webb have also amplified the issue in their DZMM show Tambalang Failon at Webb. Yesterday they prodded the BSP to craft guidelines for cardholders, in view of the latest SC decision. For the first time the BSP said it would issue one — next week, more than a year after the ruling came out. Will it be of any use to consumers? That, they gotta see. –Jarius Bondoc (The Philippine Star)

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