SIXTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
'13 SfP 10 P 3 :12 
SENATE 
S. No. 1620 
Introduced by Senator Miriam Defensor Santiago 
EXPLANATORY NOTE 
There is abundant evidence of the widespread use of abusive, deceptive, and unfair debt 
collection practices by many creditors and debt collectors. Abusive debt collection practices have 
contributed to a number of unwarranted personal bankruptcies, to marital instability, to loss of 
jobs, and to invasions of individual privacy. Existing laws are inadequate to protect borrowers. In 
fact, the borrowers' only recourse is Article 287 of the Penal Code. 
The purpose of this bill is to eliminate abusive debt collection practices by creditors and 
debt collectors through the following actions: first, by promoting means, other than 
misrepresentation or other abusive debt collectioni' pnktices that are available for the effective 
collection of debts; second, by ensuring that creditors and debt collectors who refrain from using 
abusive debt collection practices are not competitively disadvantaged; and third, by providing 
adequate legal remedy to consumers against abusive debt collection practices.' 
. Lw,,' 4. h .... --- .n. ~ 
.MIRIAM DEF~\lSOR sirv.TI¥O 
QJII 
. 
• This bill was originally tiled during the Thirteenth Congress, First Regular Session. 
1 


£>Hlnlr 
SIXTEENTH CONGRESS OF THE REPUBLIC 
) 
d}{\\;r \If tile }!,~nrtnr~ 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
'13 
SEP 10 P3:13 
SENAJ'E. 
S. No. 
1{)20 
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Introduced by Senator Miriam Defensor Santiago 
1 
AN ACT 
2 
PROVIDING FOR FAIR DEBT COLLECTION PRACTICES AND REQUIRING DEBT 
3 
COLLECTORS TO OBSERVE SUCH PRACTICES 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
4 
SECTION 1. Short Title, - This Act shall be known as the "Fair Debt Collection Practices 
5 
Act." 
6 
SECTION 2. Declaration of Policy. - It is: hereby declared a State policy to eliminate 
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abusive debt collection practices and to protect consumers in general against debt collection 
8 
abuses. 
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SECTION 3. Definition of Terms. -For the purpose of this Act, the term: 
10 
(A) 
"Communication" means the conveying of information regarding a debt directly 
11 
or indirectly to any person through any medium; 
12 
(B) 
"Consumer" means any natural person obligated or allegedly obligated to pay any 
13 
debt. The term includes the consumer's spouse, parent if the consumer is a minor, guardian, 
14 
executor, or administrator; 
15 
(C) 
"Creditor" means any person who offers or extends credit creating a debt to 
16 
whom a debt is owed, but such term does not include any person to the extent that he receives an 
17 
assignment or transfer of a debt in default solely for the purpose of facilitating collection of such 
18 
debt for another; 
19 
(D) 
"Debt" means any obligation or alleged obligation of a consumer to pay money 
20 
arising out of a transaction in which the money, property, insurance, or services which are the 
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subject of (he transaction are primarily for personal, family, or household purposes, whether or 
2 
not such obligation has been reduced to judgment; 
3 
(E) 
"Debt collector" means any person who is engaged in business the principal 
4 
purpose of which is the collection of any debt, or y.;\19. r.eg,u!!!t!y collects or attempts to collect, 
5 
directly or indirectly, debts owed or due or asserted to be owed or due him or to another, 
6 
including any creditor who collects his own debts. 
7 
The term does not include -
8 
(1) 
Any officer or employee of ~ creditor while, in the name of the creditor, 
9 
collecting debts for such creditor; 
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12 
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(2) 
(3) 
(4) 
(5) 
(6) 
Any person while acting as a debt collector for another person, both of 
whom are related by common ownership or aftiliated by corporate control, 
if the person acting as a debt collector does so only for persons to whom it 
is so related or affiliated and if the principal business of such person is not 
the collection of debts; 
Any officer or employee of government, national or local, to the extent 
that collecting or attempting! ib ''c611d';tany debt is in the performance of 
his official duties; 
Any person while serving or attempting to serve legal process on any other 
person in connection with the judicial enforcement of any debt; 
Any attorney-at-law collecting a debt as attorney on behalf of and in the 
name of a client; and 
Any person collecting or attempting to collect any debt owed or due or 
asserted to be owed or due another to the extent such activity -
(a) 
(b) 
(c) 
Is· incidental to a bona fide ftduciary obligation or a bona fide 
escrow arrangement; 
Concerns a debt which was originated by such person; 
Concerns a debt which was not in default at the time it was 
obtained by such person; 
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1 
(d) 
Concerns a debt obtained by such person as a secured party in 
2 
commercial credit transaction involving the creditor. The term 
3 
location information means a consumer's place of abode and his 
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telephone number, ir" ~n.Y:,", ~t .. such place, or his place of 
5 
employment. 
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SECTION 4. Acquisition of Location Information. - Any debt collector communicating 
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with any person other than the consumer for the purpose of acquiring information about the 
8 
consumer shall: 
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(A) 
Identify himself, state that he is conforming or correcting location information 
10 
concerning the consumer, and, if expressly requested, identify his employer; 
11 
12 
(B) 
(C) 
Not state such consumer owes any debt; 
Not communicate with any such person more than once unless requested to do so 
13 
by such person or unless the debt collector reasonably believes that the earlier response of such 
14 
person is erroneous or incomplete and that such person now has correct or complete location 
15 
infon,nation. 
'In' [, , . "': 
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(D) 
Not use any language or symbol on any language or in the contents of any 
17 
communication effected by the mails or telegram that indicates that the debt collector is in the 
18 
debt collection business or that the communication relates to the collection of debt; and 
19 
(E) 
After the debt collector knows the consumer is represented by an attorney with 
20 
regard to the subject debt and has knowledge of, or can readily ascertain, such attorney's name 
21 
and address, not communicate with any person other than that attorney, unless the attorney fails 
22 
to respond within a reasonable period of time to communicate from the debt collector. 
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SECTION 5. Communication in Collection with Debt Collection. -
24 
(A) 
Communication with Consumer. - Without the prior consent of the consumer 
25 
given directly to the debt collector or the express permission of a court of competent jurisdiction, 
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1 
a debt collector may not communicate with a consumer in connection with the collection of any 
2 
debt-
3 
(I) 
At any unusual time or place or a time or place known or which should be 
4 
known to be inconvenient to, the consumer. In the absence of knowledge 
,." .. ,.'" ..... "'·",f' .,.1"" 
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of circumstances to the contrary, a debt collector shall assume that the 
6 
convenient time for commUliicating with a consumer is after 8 0 clock 
7 
a.m. and before 9 o'clock pm., local time at the consumer's location, on 
8 
any day of the week including Saturdays and Sundays and even holidays; 
9 
(2) 
If the debt collector knows the consumer is represented by an attorney 
10 
with respect to such debt and has knowledge of, or can readily ascertain, 
11 
such attorney's name and address, unless the attorney fails to respond 
12 
within a reasonable period of time to a communication from the debt 
13 
collector or unless the attorney consents to direct communication with the 
14 
consumer; or 
15 
(3) 
At the consumer's place of employment if the debt collector knows or has 
16 
reason to know that the comallner's~fuplbyer prohibits the consumer from 
17 
receiving such communication. 
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(B) 
Communication with Third Parties. - Except as provided in section 4 of this Act, 
19 
without the prior consent of the consumer given directly to the debt collector, or the express 
20 
permission of a court of competent jurisdiction, or as reasonably necessary to effectuate post 
21 
judgment judicial remedy, a debt collector may not communicate, in communication with the 
22 
collection of any debt, with the collection of any debt, with any person other than the consumer 
23 
or his attorney. 
24 
(C) 
Ceasing Communication. - If a consumer notifies a debt collector in writing that 
25 
the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further 
26 
communication with the consumer, the debt collector shall not communicate further with the 
27 
consumer with respect to such debt, except --
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(I) 
(2) 
(3) 
To advise the consumer that the debt collectors further efforts are being 
terminated; 
To notify the consumer that the debt collector or creditor may invoke 
specified remedies which are {)r~in.a:.ilyJnvoked by such debt collector or 
creditor; or 
Where applicable, to notify the consumer that the debt collector or creditor 
7 
intends to invoke a specified remedy. If such notice from the consumer is 
8 
made by mail, notification shall be complete upon receipt. 
9 
SECTION 6. Harassment or Abuse. - A debt collector may not engage in any conduct the 
10 
natural consequence' of which is to harass, oppress, or abuse any person in connection with the 
11 
collection of a debt. Without limiting the general application of the foregoing and without 
12 
prejudice to the application of pertinent provisions of the Revised Penal Code and other laws, the 
13 
following conduct is a violation of this section: 
14 
(A) 
The use or threat of use of violence or other criminal means to harm the physical 
15 
person, reputation, or property of any reason; 
16 
(B) 
The use of obscene or profane language or language the natural consequence of 
17 
which is to abuse the hearer or reader; 
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(C) 
(D) 
The publication of a list of consumers who allegedly refuse to pay debts; or 
The advertisement for sale of any debt to coerce payment of the debt. 
20 
SECTION 7. False or Misleading Representations. - A debt collector may not use any 
21 
false, deceptive, or misleading representation or means in connection with the collection of any 
22 
debt. Without limiting the general application of the foregoing and without prejudice to the 
23 
application of pertinent provisions of the Penal Code and other laws, the following conduct is a 
24 
violation of this section: 
25 
26 
(A) 
(B) 
The unauthorized use of any badge, uniform, or facsimile thereof. 
The false representation of -
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1 
(I) 
The character, amount, or legal status of any debt; or 
2 
(2) 
Any services rendered or compensation which may be lawfully received 
3 
by any debt collector for the collection of the debt. 
4 
(C) 
The false representation or implication that any individual is an attorney or that 
,,~ 
, 
.j" 
", .. "" 
5 
any communication is from an attorney. 
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(D) 
The representation or implication that non-payment of any debt will result in 
7 
arrest or imprisomnent of any person or the seizure, garnishment, attachment, or sale of any 
8 
property or wages of any person unless such action is unlawful and the debt collector or creditor 
9 
intends to take such action. 
10 
(E) 
The threat to take any action that cannot be legally taken. 
11 
(F) 
The false representation or implication that a sale, referral, or other transfer of any 
12 
interest in a debt shall cause the consumer to: 
13 
(I) 
Lose any claim or defense to payment of the debt; or 
14 
(2) 
Become subject to any practice prohibited by this Act. 
15 
(0) 
The false representation or implication that the consumer committed any crime or 
16 
other conduct in order to disgrace the consumer. 
", 
." : 
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(H) 
Communication or threatening to communicate to any person credit information 
18 
which is known or which should be known to be false, including the failure to communicate that 
19 
a disputed debt is disputed, 
20 
(I) 
The use or distribution of any written communication which simulates or is 
21 
falsely represented to be a document authorized, issued, or ,approved by any court, official, or 
22 
agency of government, national or local, or which creates a false impression as to its source, 
23 
authorization, or approval. 
24 
(J) 
The use of any false representation or deceptive means to collect or attempt to 
25 
collect any debt or to obtain information concerning a consumer. 
26 
(K) 
Except as otherwise provided for communications, to acquire location information 
27 
under section 4 of this Act, the failure to disclose cleariy in all communications made to collect a 
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debt or to obtain information about a consumer, that the debt collector is attempting to collect a 
2 
debt and that any information obtained will be used for that purpose. 
3 
(L) 
The false representation or implication that accounts have been turned over to 
4 
innocent purchasers for value. 
5 
(M) 
The use of any business, company, or organization name other that the true name 
6 
of the debt collector's business, company, or organization. 
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SECTION 8. Unfair Practices. - A debt collector may not use unfair or unconscionable 
8 
means to collect or attempt to collect any debt. WII;llllJUl limiting the general application of the 
9 
foregoing and without prejudice to the 
Civil Code, Penal Code, and other laws, 
>.11 
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the following conduct is a violation of this section: 
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(A) 
The collection of any amount, inciuding any interest, fee, charge, or expense 
12 
incidental to the principal obligation, unless such amount is expressly authorized by the 
13 
agreement creating the debt or permitted by law; 
14 
(B) 
The acceptance by a debt collector from any person of a check or other payment 
15 
instrument postdated by more than five days unleSSI!~uchpetson is notified in writing of the debt 
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collector's intent to deposit such check or instrument not more than ten nor less than three 
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business days prior to such deposit; 
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(C) 
The solicitation by a debt collector o€ 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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(D) 
Depositing of threat.ening to deposit any P9stdated check or other postdated 
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instrument prior to the date on such check or instrument; 
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(E) 
Causing charges to be made to any person for communications by concealment of 
23 
the true purpose of the communication, including, but not limited to, collect telephone calls and 
24 
telegram fees; 
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(F) 
Taking or threatening to take any non-judicial action to effect dispossession or 
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disablement of property if -
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(1) 
There is no present right to possession of the property claimed as collaleral 
2 
through an enforceable security interest; 
3 
(2) 
There is no present intention to take possession of the property; or 
4 
(3) 
The property is exempt by la\VJro~ ,~uc~. dispossession or disablement. 
5 
(0) 
Using any language or symbol, other than the debt collector's address, on any 
6 
envelope when communicating with a consumer by use of the mails or by telegram, except that a 
7 
debt collector may use his name if such name does hot indicate that he is in the debt collection 
8 
business. 
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SECTION 9. Validation of Debts; Notice of Debt; Contents. - Within five days after the 
10 
initial communication with a consumer in connection with the collection of any debt, a debt 
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collector shall, unless the following information is contained in the initial communication or the 
12 
consumer has' paid the debt, send the consumer a written notice containing -
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14 
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(A) 
(3) 
(C) 
The amount of the debt; 
The name of the creditor to whom the debt is owed; 
A statement that unless the consum~~,withlh;thirty days after the receipt of the 
16 
notice; disputes the validity of the debt, or any portion thereof, the debt will be assumed to be 
17 
valid by the debt collector 
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(D) 
A statement that if the consumer notifies the debt collector in writing within the 
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thirty-day period that the debt, or any portion thereof, is disputed the debt collector will obtain 
20 
verification of the debt or a copy of a judgment against the consumer and a copy of such 
21 
verification or judgment will be mailed to the consumer by the debt collector; and 
22 
(E) 
A statement that, upon the consumer's written request within the thirty-day 
23 
period, the debt collector will provide the consumer with the name and address of the original 
24 
creditor, if different from the current creditor If the consumer notifies the debt collector in 
; 
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writing, within the thirty (30) day period described above, that the debt or any portion thereof is 
26 
disputed, or that the consumer requests the name and address of the original creditor, the debt 
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collector shall cease collection of the debt, or any disputed portion thereof, until the debt 
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collector obtains verification of the debt or a copy of a judgment, or the name and address of the 
2 
original creditor, is mailed to the consumer by the debt collector. 
3 
The failure of a consumer to dispute the validity of a debt under this section may not be 
4 
construed by any COUlt as an admission of liability by, th~ ,~0n.s,~.mer. 
5 
SECTION 10. Multiple Debts. - If any consumer owes multiple debts and makes any 
6 
single payment to any debt collector with respect to such debts, such debt collector may not 
7 
apply such payment to any debt which is disputed by the consumer and, where applicable, shall 
8 
apply such payment in accordance with the consumer's directions. 
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SECTION II. Venue of Legal Actions by Debt Collectors. - Any debt collector who 
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brings any legal action on a debt against any consumer shall --
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(A) 
In the case of an action to enforce an interest in real property securing the 
12 
consumer's obligation, bring such action only in the place where the property or any part thereof 
13 
lies; 
14 
(B) 
In the case of an action not describ~dliri paragl-aph (A), bring such action only in 
15 
the place of the execution of the contract sued upon; or in which such consumer resides at the 
16 
commencement of the action. 
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SECTION 12. Furnishing Deceptive Forms. - It is unlawful to design, compile, and 
18 
furnish any form knowing that such fOlm would be used to create the false belief in a consumer 
19 
that a person other than the creditor of such consumer is participating in the collection of or in an 
20 
attempt to collect such consumer allegedly owes su~h creditor, when in fact such person is not so 
21 
participating. ' 
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Any person who violates this section shall be liable to the same extent and in the same 
23 
manner as a debt collector is liable under Section'13 of this Act for failure to comply with a 
24 
provision of this Act. 
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SECTION 13. Civil Liability . . -
2 
(A) 
Amount of Damages. - Except as otherwise provided by this section, any debt 
3 
collector who fails to comply with any provision of this Act with respect to any person is liable 
4 
to such person in an amount equal to the sum of -
5 
(1) 
Any actual damage sustained by such person as a result of such failure; 
6 
(2) 
In the case of any action by an individual, such additional damages as the 
7 
court may allow, but not exceeding Twenty Thousand Pesos (P20,OOO.OO); 
8 
or 
9 
(3) 
I 
In the case of a class action, such amount for each named plaintiff as could 
10 
be recovered under paragraph (A), and such amount as the court may 
11 
allow for all other class members, without regard to a minimum individual 
12 
recovery, not to exceed the lesser of Fifty Thousand Pesos (P50,OOO.OO) or 
13 
one (1) per centum of the net worth ofthe debt collector; and 
14 
(B) 
Factors Considered by the Court. - In determining the amount of liability in any 
15 
action under paragraph (A) of this section, the court shall consider, among other relevant factors: 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
(C) 
(1) 
(2) 
In any individual action Ul1der-' p'at"agtaph (A)(2) of this section, the 
frequency and persistence of non-compliance by the debt collector, the 
nature of such noncompliance, and the extent to which such non-
compliance was intentional; or 
In any class action under paragraph (A)(2) of this section, the frequency 
and persistence ofnon-complianc~ by the debt collector, the nature of such 
non-compliance, the resources of the debt collector, the number of persons 
adversely affected, and the extent to which the debt collector's non-
compliance was intentional. 
Intent. - A debt collector may not be held liable in any action brought under this 
26 
section if the debt collector shows by a preponderance of evidence that the violation was not 
27 
intentional and resulted from a bona fide error notwithstanding the maintenance of procedures 
28 
reasonably adopted to avoid any such error. 
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1 
(D) 
Jurisdiction. - An action to enforce any liability created by this Act may be 
2 
brought in any appropriate court using as jurisdictional basis the amount of debt involved. 
3 
SECTION 14. Separability Clause. - If any pro.vision or part thereof is held invalid or 
4 
unconstitutional, the reminder of the law of the provision not otherwise affected shall remain 
5 
valid and subsisting. 
6 
SECTION 15. Repealing Clause. - Any lav:" presidintial decree or issuance, executive 
7 
order, letter of instruction, administrative order, rule, or regulation contrary to or inconsistent 
8 
with the provisions of this Act is hereby repealed, modified, or amended accordingly. 
9 
SECTION 16. Effectivity Clause. - This Act shall take effect fifteen (15) days after its 
10 
pUblication in at least two (2) newspaper of general circulation. 
Approved, 
j f' " -
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