MANILA, Philippines – Before January 6, 2011, it is a common practice of credit card companies to endorse to collection agencies long over-due accounts without any prior advice/notification to the credit cardholders.

Not anymore.

On December 15, 2010, Circular No. 702, the latest regulation of the Bangko Sentral ng Pilipinas (BSP) on credit card transactions was promulgated. On December 22, 2010, BSP Circular No. 702 was published in one of the newspaper of general circulation. The effectivity of Circular 702 is January 6, 2011 which is fifteen (15) days following its publication.

One of the salient features of Circular No. 702 states that: “Banks/quasi-banks and their subsidiary/affiliate credit card companies shall inform their cardholders in writing of the endorsement of the collection of their account to a collection agency/agent, or the endorsement of their account from one 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: Provided, that the required notification in writing shall be included in the terms and conditions of the credit card agreement. Banks/quasi-banks and the subsidiary/affiliate credit card companies shall adopt policies and procedures to ensure that personnel handling the collection accounts, whether these are in-house collectors, or third-party collection agents, shall disclose his/her full name/true identity to the cardholder.”

Circular No. 702 is a timely relief for consumers who now and then buy goods and services on credit and not on cash basis. Not to mention the embarrassment caused by the persistent calls by collection agencies at the most unholy time of the day… even at night.

Also, not many know that effective January 6, 2011, the issuance by banks/quasi-banks and their subsidiary or affiliate credit card companies of pre-approved credit cards is no longer allowed by BSP under Circular No. 702.

Thanks to BSP for Circular No. 702.

For those who are interested to know more about interests and penalties on credit card transactions – I recently came out with a 230-page, 6x9 book titled “What credit cardholders should know about interests and penalties on credit card transactions.” This book is the first of its kind in the market.

The book I authored on interests and penalties on credit card transactions is available in the different branches of National Book Store in Metro Manila and in the Provinces; Power Book Store; Fully Book (Sketch Book). Also available at eAsia Outsourcing & Marketing Services, Telephone No. (02) 551-8855.

Have a joyful day!