In Part IV of this series that appeared in this column last October 16, 2010 – I mentioned three (3) Senate bills on the proposed reduction of interest rates charged by credit card companies filed be Senators Manuel Villar Jr., Francis Escudero, and Ramon Revilla Jr. However, I failed to mention House Bill No. 1561, An Act Providing Protection to Credit Card Holders by Setting a Ceiling on Interest Rates and Surcharges and Prohibiting Hidden Penalties or Costs Imposed by Credit Card Companies, Banks, and Similar Institutions on Purchases and Cash Advances Made Through Such Facility introduced by Representative Raymond Democrito C. Mendoza (July 19, 2010, 15th Congress, First Regular Session). The salient provisions of House Bill No. 1561 on interest rates, surcharges and reasonable attorney’s fees and expenses of collection are the same as the Senate Bills of Senators Escudero and Revilla. (Please see Part IV)

Incidentally, both the Senate Bills of Senators Escudero and Revilla on credit cards makes reference to the provisions of the so-called Access Devices Regulations Act of 1998 (Republic Act No. 8484 dated February 11, 1998).

One may ask: What is this law? Basically, this law protects parties of commercial transactions by regulating the issuance and use of access devices. Section 3 of the law defines Access Device as any card, plate, code, account number, electronic serial number, personal identification number, or other telecommunications service, equipment, or instrumental identifier, or other means of account access that can be used to obtain money, good, services, or any other thing of value or to initiate a transfer of funds (other than a transfer originated solely by paper instrument. In short, this Law (R.A. No. 8484) protects consumers from scams involving access devices like credit card frauds.

In Section 9 of the Access Devices Regulations Act of 1998 (R.A. No. 8484), the following acts shall constitute access device fraud and are hereby declared to be unlawful:

“(a) producing, using, trafficking in one or more counterfeit access devices;

“(b) trafficking in one or more unauthorized access devices or access devices fraudulently applied for;

“(c) using, with intent to defraud, an unauthorized access device;

“(d) using an access device fraudulently applied for;

“(e) possessing one or more counterfeit access devices or access devices fraudulently applied for;

“(f) producing, trafficking in, having control or custody of, or possessing device-making or altering equipment without being in the business or employment, which lawfully deals with the manufacture, issuance, or distribution of such equipment;

“(g) inducing, enticing, permitting or in any manner allowing another, for consideration or otherwise to produce, use, traffic in counterfeit access devices, unauthorized access devices or access devices fraudulently applied for;

“(h) multiple imprinting on more than one transaction record, sales slip or similar document, thereby making it appear that the device holder has entered into a transaction other than those which said device holder had lawfully contracted for, or submitting, without being an affiliated merchant, an order to collect from the issuer of the access device, such extra sales slip through an affiliated merchant who connives therewith, or, under false pretenses of being an affiliated merchant, present for collection such sales slips, and similar documents;

“(i) disclosing any information imprinted on the access device, such as, but not limited to, the account number or name or address of the device holder, without the latter's authority or permission;

“(j) obtaining money or anything of value through the use of an access device, with intent to defraud or with intent to gain and fleeing thereafter;

“(k) having in one's possession, without authority from the owner of the access device or the access device company, an access device, or any material, such as slips, carbon paper, or any other medium, on which the access device is written, printed, embossed, or otherwise indicated;

“(l) writing or causing to be written on sales slips, approval numbers from the issuer of the access device of the fact of approval, where in fact no such approval was given, or where, if given, what is written is deliberately different from the approval actually given;

“(m) making any alteration, without the access device holder's authority, of any amount or other information written on the sales slip;

“(n) effecting transaction, with one or more access devices issued to another person or persons, to receive payment or any other thing of value;

“(o) without the authorization of the issuer of the access device, soliciting a person for the purpose of:

1) offering an access device; or
2) selling information regarding or an application to obtain an access device; or

“(p) without the authorization of the credit card system member or its agent, causing or arranging for another person to present to the member or its agent, for payment, one or more evidence or records of transactions made by credit card.”

Going back to the two (2) Bangko Sentral ng Pilipinas (BSP) Circulars (Circulars 398 dated August 21, 2003 and 454 dated September 24, 2004) credit cardholders will be interested to know that under the provisions of BSP Circular No. 454, credit card companies are likewise cautioned to refrain from unfair collection practices including the following:

“a) the use or threat of violence or other criminal means to harm the physical person, reputation, or property
of any person;

“b) the use of obscenities, insults, or profane language which amount to a criminal act or offense under applicable laws;

“c) disclosure of the names of credit cardholders who allegedly refuse to pay debts, except as allowed under Subsec. X320.9 and 4301N.9;

“d) threat to take any action that cannot legally be taken;

“e) communicating or threat to communicate to any person credit information which is known to be false, including failure to communicate that a debt is being disputed;

“f) any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a cardholder; and

“g) making contact at unreasonable/inconvenient times or hours which shall be defined as contact before 6:00 a.m. or after 10:00 p.m., unless the account is past due for more than sixty (60) days or the cardholder has given express permission or said times are the only reasonable or convenient opportunities for contact.”

Finally, the most recent law that affects credit cardholders is the so-called Credit Information System Act (CISA) signed into law by then President Gloria Macapagal Arroyo on October 31, 2008 (Republic Act No. 9510).

(TO BE CONTINUED)