NINETEENTH CONGRESS OF THE ] 
REPUBLIC OF THE PHILIPPINES ] 
First Regular Session 
]
S.B. No.
SENATE
813
of III? ^E-crptarp
72 JUL 25 A11 34
RlXEIVtD BY;
Introduced by SEN. WIN GATCHALIAN
AN ACT
REGULATING THE DEBT COLLECTION PRACTICES OF 
DEBT COLLECTORS TO PROTECT BORROWERS FROM ABUSES, 
HARASSMENT, UNFAIR TREATMENT AND MISREPRESENTATIONS
EXPLANATORY NOTE
With the steady growth of the Philippine economy, the increase in the 
purchasing power of middle-class Filipinos, and :he emerging reliance on technology 
and the internet, complaints on widespread use of abusive, deceptive and unfair debt 
collection practices by many creditors and debt collectors have proliferated.
A number of unscrupulous collection agencies and debt collectors have taken 
advantage of borrowers by using false or misleading advertisements to lure them to 
borrow at unreasonable interest rates, by continuously harassing them and their 
Phonebook contacts, or by using offensive or threatening tactics in order to collect the 
debts owed to their clients. Such abusive debt collection practices have contributed to 
a number of unwarranted personal bankruptcies, marital problems, loss of 
employment, depression, stress and invasions of individual privacy.
With the recent passage of Republic Act No. 11765, otherwise as the "Financial 
Products and Services Consumer Protection Act", financial regulators are mandated to 
provide consumer redress or complaints handling mechanisms while financial service


providers are now obligated to establish a financial consumer protection assistance 
mechanism. Notwithstanding its prohibition against employing abusive collection or 
debt recovery practices, a more concrete framework is needed to put an end to these 
practices, redress injuries, or adequately protect borrowers from unfair and abusive 
debt collection practices.
Accordingly, this measure aims to eliminate, if not minimize, unfair and abusive 
debt collection practices conducted by debt collectors against consumer-borrowers by 
providing allowable means to acquire location information of the borrower and 
enumerating prohibited acts. It likewise places the debt collector and the consumer- 
borrower in the same level playing field as the measure provides adequate legal 
remedies to borrowers who are victims of these wayward practices.
In view of the foregoing, passage of this bill Is earnestly'^ou^t.
rGATCHA


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NINETEENTH CONGRESS OF THE ] 
REPUBLIC OF THE PHILIPPINES ] 
First Regular Session 
]
72 JUL 25 All 34
SENATE
S.B. No. 818
RECEIVED BY.
Introduced by SEN. WIN GATCHALIAN
AN ACT
REGULATING THE DEBT COLLECTION PRACTICES OF 
DEBT COLLECTORS TO PROTECT BORROWERS FROM ABUSES, 
HARASSMENT, UNFAIR TREATMENT AND MISREPRESENTATIONS
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled:
SECTION 1. Short Title. 
Practices Act".
This Act shall be known as the "Fair Debt Collection
SEC. 2. Declaration of Policy. — It is hereby declared a State policy to prohibit 
and eHminate the use of abusive, deceptive and unfair debt collection practices by 
debt collectors, to ensure that those debt collectors who refrain from using abusive 
debt collection practices are not competitively disadvantaged, and ultimately, to 
protect borrowers against abuse and harassment in the collection of their debts.
SEC. 3. Definition of Terms. - For the purposes of this Act, the term:
(a) Debt Collector means any person who uses any instrumentality or any
business, the principal purpose of which is the collection of any debts, or who
regularly collects or attempts to collect, directly or indirectly, debts owed or due or
asserted to be owed or due another. It includes any creditor who, in the process of
collecting his own debts, uses any name other than his own, would Indicate that a
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third person is collecting or attempting to collect such debt. It is likewise
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interchangeable with a debt collection agency or a third-party service provider
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engaged by a creditor for the purpose of collecting debts owed by another. The
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definition does not include:
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(i) 
A person who is collecting or attempting to collect a debt of which
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the he or she is the original creditor or owner;
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(ii) 
A business that acquires a debt or debts through the seizure of
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accounts receivable under a security agreement;
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(iii) 
A corporation that purchases a debt or debts through acquiring
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or merging with a business in a transaction that includes the transfer of accounts
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receivables;
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(iv) 
A person to whom the contract that gave rise to the debt was
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assigned for the purpose of financing the transaction;
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(v) 
An officer or employee of the creditor who In the name of the
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creditor, collects the debt for the creditor;
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(vi) 
Any person or entity who acts a debt collector for another person
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or entity who are related by common ownership or affiliated by corporate
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control, if the person or entity collects the debt for persons or entities whom it
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is related or affiliated to and its principal business is not the collection of debts;
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(vii) 
Any officer or employee of government, national or Iccal, to the
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extent that collecting or attempting to collect any debt is in the performance of
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his official duties;
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(viii) 
Any person while serving or attempting to serve legal process on
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any other person in connection with the judicial enforcement of any debt; and
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(ix) 
Any attorney-at-law collecting a debt as attorney on behalf of
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and in the name of a client.
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(b) Contact means communications by telephone, mobile phone, facsimile, e-
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mall, automated call system, text messaging, or any other modes, or in person,
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including messages left for a debtor with another person or by voicemail or on an
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answering machine, or any other form of communication not specifically excluded,
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but does not include communications that the debtor has expressly consented to or
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solicits in advance.
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(c) Creditorme^ns a person to whom a debtor owes a debt or who has extended 
credit to a debtor, including, but not limited to, credit in the form of a sale on credit, 
a loan of money or the provision of goods and services. It includes a financing 
company and a lending company.
(d) Debt means a monetary obligation enforceable at law owed by a debtor, 
including, but not limited to, a purchase on credit, accounts receivable, a loan of 
money or the provision of goods or services.
(e) Debtor medics an individual who has an obligation for a debt, including, but 
not limited to, the owner of a sole proprietorship, a member of a partnership, or an 
individual who has provided a personal guarantee.
(f) Express Consent medins consent in a verifiable form, including, but not limited 
to, writing and audio recordings.
(g) Representative means a person, other than the debtor or creditor, that is 
duly authorized by the debtor or creditor to contact or be contacted and communicate 
with about the debt.
SEC. 4. Acquisition of Location Information. - Any debt collector communicating 
with any person other than the borrower for the purpose of acquiring location 
information about the borrower shall:
(1) Identify himself, state that he Is confirming or correcting location information 
concerning the borrower, and only if expressly requested, identify his employer;
(2) Not state that such borrower owes any debt;
(3) Not communicate with any such person more than once unless requested to 
do so by such person or unless such debt collector reasonably believes that the earlier 
response of such person is erroneous or incomplete and that such person now has a 
correct or complete location information;
(4) Not communicate by post card;
(5) Not use any language or symbol on any envelope or in the contents of any 
communication that indicates that the debt collector is In the debt collection business 
or that the communication relates to the collection of debt;
(6) After the debt collector knows the borrower is represented by an attorney 
with regard to the subject debt and has knowledge or, can readily ascertain, such


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attorney's name and address, not communicate with any person other than the
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attorney, unless the attorney fails to respond within a reasonable period of time to
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the communication from the debt collector.
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SEC. 5. Allowable Debt Collection Practices. - Financing companies, lending
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companies, credit card companies, creditors, debt collectors and third party service
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providers engaged by creditors (collectively known as 'Debt Collector') may resort to
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all reasonable and legally permissible means to collect amounts due them under the
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loan agreement, provided that in the exercise of their rights and performance of their
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duties, they must observe good faith and reasonable conduct, and refrain from
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engaging in abusive, unfair, and untoward acts enumerated in this Act.
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SEC. 6. Prohibition Against Harassment or Abuse. - A debt collector shall not
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engage in any conduct the natural consequence of which is to harass, oppress, or
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abuse any debtor in connection with the collection of a debt. Without limiting the
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general application of the foregoing and without prejudice to the application of the
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pertinent provisions of the Revised Penal Code and other laws, the following conduct
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shall be considered a violation of this section:
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(a) The use or threat of use of violence or other criminal means to harm
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the physical person, reputation, or property of the debtor or his/her family;
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(b) The use of obscene or profane language or language the natural
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consequence of which is to abuse or shame the debtor or his/her family and/or
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which amount to a criminal act or offense under applicable laws;
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(c) The disclosure or publication or posting of the names and other
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personal information of the borrowers who allegedly refuse to pay debts, except
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as may be allowed In Section 10 of this Act;
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(d) The advertisement for sale of any debt to coerce payment of the debt:
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(e) Causing a telephone or mobile phone to ring or engaging any person
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in telephone or mobile phone conversation repeatedly or continuously with
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intent to annoy, abuse or harass any person at the called number; and
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(f) Except as provided in this Act, the placement of telephone or mobile
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phone calls without meaningful disclosure of the caller's Identity.


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SEC. 7. False or Misleading Representations. — A debt collector shall not
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use any false, deceptive, or misleading representation or means in connection with
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the collection of any debt. Without limiting the general application of the foregoing
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and without prejudice to the application of pertinent provisions of the Revised Penal
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Code and other laws, the following conduct is a violation of this section:
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(1) The unauthorized use of any badge, uniform, or facsimile thereof;
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(2) The false representation of the following:
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(a) The character, amount or legal status of any debt; or
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(b) Any services rendered or compensation which may be lawfully
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received by any debt collector for the collection of the debt;
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(3) The false representation or implication that any individual is an attorney or
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that any communication is from any attorney;
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(4) The representation or implication that non-payment of any debt will result
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in arrest or imprisonment of any person or the seizure, garnishment, attachment or
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sale of any property or wages of any person unless such action is unlawful and the
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debt collector or creditor intends to take such action;
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(5) The use of threat to take any action that cannot be legally taken;
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(6) The false representation or implication that a sale, referral or other transfer
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of any interest in a debt shall cause the borrower to:
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(a) Lose any claim or defense to payment of the debt; or
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(b) Become subject to any practice prohibited by this Act;
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(7) The false representation or implication that the borrower committed any
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crime or other conduct in order to disgrace the borrower;
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(8) Communication or threatening to communicate to any person credit
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information which is known or which should be known to be false, including the failure
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to communicate that a disputed debt is disputed;
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(9) The use or distribution of any written communication which stimulates or is
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falsely represented to be a document authorized, issued or approved by any court,
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official, or agency of the government, national or local, or which creates a false
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Impression as to its source, authorization or approval
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(10) The use of any false representation or deceptive means to collect or
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attempt to collect any debt or to obtain information concerning a borrower;
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(11) Except as otherwise provided for communication, to acquire location
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Information under Section 4 of this Act, the failure to disclose clearly in all
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communications made to collect a debt or to obtain information about a borrower,
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that the debt collector is attempting to collect a debt and that any information
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obtained will be used for that purpose;
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(12) The false representation or implication that accounts have been turned over
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to innocent purchasers for value;
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(13) The use of any business, company, or organization name other than that
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true name of the debt collector's business, company, or organization; and
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(14) Give any person, directly or indirectly, by implication or otherwise, any false
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or misleading information, Including, but not limited to, references to the police, a
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law firm, prison, credit history, court proceedings or a lien or garnishment.
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SEC. 8. Unfair Collection Practices. — A debt collector shall not use unfair or
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unconscionable means to collect or attempt to collect any debt. The following conduct
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shall be considered a violation of this Section:
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(1) The collection of any amount (including any interest, fee, charge or expense
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incidental to the principal obligation) unless such amount is expressly authorized by
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the agreement creating the debt or permitted by law;
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(2) The acceptance by a debt collector from any person of a check or other
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payment instrument postdated by more than five (5) days unless such person is
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notified in writing of the debt collector's intent to deposit such check or instrument
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not more than ten (10) nor less than three (3) business days prior to such deposit;
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(3) The solicitation by a debt collector of any postdated check or other postdated
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payment instrument for the purpose of threatening or Instituting criminal prosecution;
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(4) Depositing or threatening to deposit an / postdated check or other postdated
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instrument prior to the date on such check or instrument;
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(5) Causing charges to be made to any person for communications by
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concealment of the true purpose of the communication. Such charges include, but
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are not limited to, collect telephone calls and telegram fees;
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(6) Taking or threatening to take any non-judicial action to effect dispossession
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or disablement of property if —


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(a) There is no present right to possession of the property claimed as
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collateral through an enforceable security interest;
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(b) There is no present right to take possession of the property; or
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(c) The property is exempt by law from such dispossession or
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disablement.
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(7) Using any language or symbol, other than the debt collector's address, on
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any envelope when communicating with a borrower by use of the mails or by
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telegram.
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SEC. 9. Other Prohibited Acts and Practices. — No debt collector shall commit
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any of the following prohibited acts and practices:
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(a) Collect or attempt to collect money for a creditor except on the belief in good
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faith that the money is due and owing by the person to the creditor;
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(b) Fail to provide a contact number for the debtor to call when the debt collector
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uses an automated call system to contact the debtor;
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(c) Collect or attempt to collect a debt without providing the real name of the
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agent or representative of the debt collector, the contact number, the registered
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name and address of the debt collector;
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(d) Make any arrangement with a debtor to accept a sum of money that is less
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than the amount of the balance due and owing to a creditor as final settlement
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without the prior express consent of the creditor;
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(e) Fail to provide a written report on the status of the account of any person
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with whom the debt collector transacts with;
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(f) Make any personal call or telephone call for the purpose of collecting or
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attempting to collect a debt on any day except between 8 a.m. to 9 p.m.;
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(g) Directly or indirectly threaten or state an intention to proceed with any action
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for which the debt collector does not have the prior express consent of the creditor
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or for which there is no lawful authority;
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(h) Continue to collect or attempt to collect money from, or continue to
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communicate with:


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(i) A person who has informed the debt collector that he or she is not the
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debtor, unless the debt collector first takes all reasonable precautions to ensure
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that the person is in fact the debtor, or
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(ii) The debtor, when he or she has informed the debt collector by any
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verifiable means, including, but not limited to, personal service, certified mail,
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courier, facsimile, or e-mail, or by any other method, that the debt is in dispute
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and that the debtor wishes the creditor to take the matter to court;
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(i) Contact a debtor's spouse, relative, neighbor, friend or acquaintance unless
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the contact is limited to the purpose of coiifirming or correcting the debtor's
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residential address, personal telephone number or employment telephone number;
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(j) Contact the debtor's employer for any purpose other than to confirm the
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debtor's employment status, business title and the address of the business, in
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preparation for legal proceedings;
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(k) Contact the debtor when he or she has notified the debt collector in writing
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to communicate only with the debtor's representative, providing therein the current
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address and telephone number of the same for the purpose of:
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(i) Making reasonable arrangements to discuss the debt with the debt
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collector, and
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(ii) Discussing the debt with the debt collector in accordance with the
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arrangements;
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(I) Contact a debtor at his or her place of employment where the debtor has
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previously requested that the debt collector not ^'o contact the debtor there; Provided/
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777^fthe debtor makes reasonable arrangements to discuss the debt with the debt
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collector, and discusses the debt with the debt collector in accordance with the
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arrangements;
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(m) Communicate information about the debt or the existence of the debt with
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any person other than the debtor, a guarantor of the debt, the debtor's representative
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or the creditor of the debt, unless the debtor has expressly consented to the same;
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(n) Charge any fee to a debtor beyond the debt that is due and owing
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from the debtor to the creditor;


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(o) Refuse to provide sufficient information on request of the debtor to ensure
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that the debtor is aware of the identity of the original and current creditor of the debt
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and the details of the debt;
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(p) Enter into or arrange wage or salary assignments with a debtor or the
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employer of a debtor;
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(q) Exceed unsolicited contacts on behalf of the same creditor with a debtor In
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any period of consecutive days, not Including contacts with a third party to locate a
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debtor, mistaken contact with a third party, or contacts by traditional mail; or
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(r) Cancel or alter a payment agreement with a debtor If the debtor has
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complied with the terms of the agreement and the debtor's financial circumstances
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have not changed materially, unless the debtor has misrepresented the debtor's
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financial circumstances.
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Sec. 10. Prohibited Agreements. — Any agreement entered into by the debtor
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and the debt collector shall be deemed void if that agreement:
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(a) Misrepresents the rights and powers of a person collecting or attempting to
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collect a debt;
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(b) Misrepresents the obligations or legal iiabilities of a debtor; or
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(c) Is misleading as to its true nature and purpose.
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Sec. 11. Confidentiaiity of Information. — Creditors shall keep strictly
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confidential the data on the borrower, except under the following circumstances:
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(a) Disclosure of information with the written consent of the borrower;
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(b) Release, submission or exchange of customer information with other
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financial institutions, credit information bureaus, lenders, their subsidiaries and
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affiliates;
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(c) Upon orders of a court of competent jurisdiction or any government office
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or agency authorized by law;
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(d) Disclosure by creditors to debt collectors, counsels and other agents to
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enforce their rights against the borrower; and


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(e) Disclosure to third parties, such as insurance companies, solely for the 
purpose of Insuring the creditor from borrower default or other credit loss, and the 
borrower from fraud or unauthorized charges.
Sec. 12. Issuance of Receipts. — Every debt collector must acknowledge the 
receipt of all cash transactions, payments made in person, or payments made at the 
debtor's request that the debt collector collects or receives from a debtor for 
distribution to the debtor's creditors by means of receipts that must contain the 
following;
(a) The date the amount is collected or received;
(b) The name of the debtor;
(c) The name of the person for whom the debt collector acts on his behalf; and
(d) The amount received from the debtor.
Sec. 13. Settlement Agreement — If a debt collector reaches a settlement 
agreement with a debtor, the debt collector must, when the amount set out in the 
settlement agreement has been paid in full, provide to the debtor a receipt containing;
(a) The amount paid;
(b) The name of the creditor or creditors; and
(c) A statement that the amount received is in final settlement of the debt or 
debts owing.
Sec. 14. Request for Accounting. - A debt collector must provide the debtor on 
request, with a complete accounting of all the details of the debt and, if such an 
accounting is not in the possession of the debt collector, the agency must request 
that the creditor provide it. If, within thirty (30) days after receiving a request for an 
accounting of a debt collector, the creditor has not provided a complete accounting 
of the debt, the debt collector must:
(a) Inform the debtor in writing that it cannot provide the accounting and the 
reasons for It, and
(b) Cease all collection activity for that account and not resume collection 
activity until the accounting is provided.
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A debtor may request a complete accouncing only once every six (6) months, 
unless the debt collector fails to provide the complete accounting as requested.
Sec. 15. Administrative Penaities. - The Securities and Exchange Commission 
and the Bangko Sentral ng Pilipinas shall issue their respective rules and regulations 
for the implementation of the provisions of this Act and for the imposition of 
reasonable administrative penalties on different violations thereof
Sec. 16. Civii Liabiiity, —
(a) Amount of Damages. — Any debt collector who violates any of the 
provisions In this Act with respect to any person shall be liable to such person in an 
amount equal to the sum of:
(I) Any actual damage sustained by such person as a result of the 
violation;
(ii) In the case of any action by an Individual, such additional damages 
as the court may allow, but not exceeding Thirty Thousand Pesos 
(P30,000.00), or
(ili) In the case of a class action, such amount for each named plaintiff 
as could be recovered under paragraph (a), and such amount as the Court 
may allow for all other class members, without regard to a minimum individual 
recovery, not to exceed the lesser of Sixty Thousand Pesos (P60,00000) or one 
(1) percent of the net worth of the debt collector.
(b) Factors to be Considered by the Court. - In determining the amount of 
liability In any action under paragraph (a) of this section, the court shall consider, 
among other relevant factors:
(i) In any individual action under paragraph (a) (ii) of this section, the 
frequency and persistence of non-compliance by the debt collector, the nature 
of such non-compliance, and the extent to which such noncompllance was 
intentional, or
(ii) In any class action under paragraph (a) (Hi) of this section, the 
frequency and persistence of non-compliance by the debt collector, the nature
of such non-compliance, the resources of the debt collector, the number of
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persons adversely affected, and the extent to which the debt collector's non- 
compliance was intentional.
(c) Intent - A collector may not be held liable in any action brought under this 
section if the debt collector shows by a preponderance of evidence that the violation 
was not intentional and resulted from a bona fide error in good faith.
(d) Jurisdiction. — An action to enforce any liability created by this Act may be 
brought in any appropriate court using as jurisdictional basis the amount of debt 
involved.
Sec. 17. Separability Clause. - If any provision of this Act is declared invalid or 
unconstitutional, the provisions not affected thereby shall remain in full force and 
effect.
Sec. 18. Repealing Clause. — All laws, presidential decrees, executive orders, 
presidential proclamations, rules and regulations or parts thereof contrary to or 
inconsistent with this Act are hereby repealed or modified accordingly.
Sec. 19. Effectivity. — This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette or at least two (2) national papers of general 
circulation.
Approved,
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