The Securities and Exchange Commission (SEC) has approved Global Dominion Financing, Inc. imposed an administrative fine of P50,000 for unfair and abusive debt collection practices.
In a statement on Tuesday, the SEC said its Financing and Credit Company Department (FLCD) found that Global Dominion violated Section 1 (a), (b), and (h) of SEC Memorandum Circular (MC) No. 18, series of 2019 and Section 4.4 (a), (b), (h), and Section 4.4 (a), (b), (h) of the Implementing Rules and Regulations of Republic Act No. 11765 or the Financial Products and Services Consumer Protection Act. (i) is violated. (FCPA).
The order is based on a borrower's complaint involving the actions of third-party agents of a financing firm, who allegedly used tactics such as road blockades and persistent text messages to demand immediate partial payment and issue threats on delayed payment.
“Pursuant to the FLCD, stopping a borrower on the street in the absence of a court order or other lawful authority is not a lawful collection practice and has the tendency to intimidate, restrain, or coerce the borrower,” the SEC said.
“Meanwhile, the text messages and communications sent to the complainant amounted to pressure intended to circumvent regulatory recourse and weaken consumer protection mechanisms,” it said.
MC 18 and the FCPA prohibit abusive debt collection practices that involve the threat or use of violence or criminal means to harm a person, reputation, or property; Use of abusive or obscene language against borrowers; and contacting persons in the borrower's contact list, except guarantors or co-makers.
“[Global Dominion] “Administrative accountability cannot be avoided by holding collection agents or third party providers responsible for prohibited acts,” the January 28 order said.
“This allocation of responsibility is consistent with the FCPA IRR framework, which recognizes fiduciary responsibility/solid liability for regulated entities engaged in marketing and transactions with financial consumers and their accredited third-party service providers.”
Apart from the fine, the Commission directed Global Dominion to strictly adhere to fair and lawful debt recovery standards to protect consumers.
The SEC also warned that repeated violations could result in significant penalties, including high fines, as well as possible suspension or revocation of its right to operate.
businessworld Comment was sought from Global Dominion via e-mail but no response was received till press time. — Alexandria Grace C. Magno