THE Securities and Exchange Commission (SEC) has imposed a P50,000 administrative fine on Global Dominion Financing, Inc. for what it described as unfair and abusive debt collection practices.
In a statement on Tuesday, the SEC said its Financing and Lending Companies Department (FLCD) found Global Dominion to have 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 (I) of the implementing rules and regulations of Republic Act No. 11765, or the Financial Products and Services Consumer Protection Act (FCPA).
The order stemmed from a borrower’s complaint involving the actions of a financing firm’s third-party agents, who allegedly used tactics such as road intercepts and persistent text messages demanding immediate partial payments and issuing threats over delayed payments.
“According to FLCD, intercepting the borrower on the road in the absence of a court order or other lawful authority is not a legitimate collection practice and has the tendency to intimidate, restrain, or coerce,” the SEC said.
“Meanwhile, the text messages and communications sent to the complainant were deemed to be tantamount to pressure intended to deter regulatory recourse and undermine consumer protection mechanisms,” it added.
MC 18 and the FCPA prohibit abusive debt collection practices, including the use or threat of violence or criminal means to harm a person, reputation, or property; the use of insulting or profane language against borrowers; and contacting individuals in a borrower’s contact list, except for guarantors or co-makers.
“[Global Dominion] cannot evade administrative accountability by attributing the prohibited acts to collection agents or third-party providers,” the order dated Jan. 28 read.
“This allocation of responsibility accords with the FCPA IRR framework, recognizing solidary responsibility/solidary liability for regulated entities and their accredited third-party service providers engaged in marketing and transacting with financial consumers.”
Aside from the fine, the Commission directed Global Dominion to strictly comply with fair and lawful debt collection standards meant to protect consumers.
The SEC also warned that repeat violations could lead to heavier penalties, which may include higher fines, as well as the possible suspension or revocation of its authority to operate.
BusinessWorld sought comment from Global Dominion via e-mail but had not received a response as of press time. — Alexandria Grace C. Magno