EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
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't®Uice of ibc S>f
20 
FEB 19
SENATE
S.B. No. 
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rece;' :oG v
Intro d u ced 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 the 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 num ber 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 num ber of unwarranted personal 
bankruptcies, marital problems, loss of employment, depression, stress and 
invasions of individual privacy.
This notwithstanding, there is a dearth of laws that would 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 m eans 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. 
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In view of the foregoing, passage of this bill is esunestly sought.


EIGHTEENTH CONGRESS OF THE 
]
REPUBLIC OF THE PHILIPPINES 
]
First R egular Session 
]
of tijr S'i fiftnrp
20 
FEB 19 
P 4 :2 4
SENATE
S.B. No. 1366
R EC t: 
H T
In tro d u ced by SEN. WIN GATCHALIAN
AN ACT
REGULATING THE DEBT COLLECTION PRACTICES OF 
DEBT COLLECTORS TO PROTECT BORROWERS FROM ABUSES, 
HARASSMENT, UNFAIR TREATMENT AND MISREPRESENTATIONS
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Be it enacted by the Senate and the House of Representatives of the 
Philippines in Congress assembled:
Section 1. Short Title. -  This Act shall be known as the “Fair Debt 
Collection Practices Act”.
Sec. 2. Declaration of Policy. -  It is hereby declared a State policy to 
prohibit and eliminate 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 
harassm ent in the collection of their debts.
Sec. 3. Definition of Terms. -  For the purposes of this Act, the term;
(a) Debt Collector m eans any person who uses any instrumentality or 
any business the principal purpose of which is the collection of any debts, or


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who regularly collects or attem pts to collect, directly or indirectly, debts owed
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or due or asserted to be owed or due another. It includes any creditor who, in
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the process of collecting his own debts, uses any name other than his own,
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would indicate that a third person is collecting or attempting to collect such
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debt. It is likewise interchangeable with a debt collection agency or a third-
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party service provider engaged by a creditor for the purpose of collecting debts
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owed by another.
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The 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
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accounts 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
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it is related or affiliated to and its principal business is not the collection of
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debts;
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(vii) Any officer or employee of government, national or local, to the
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extent that collecting or attempting to collect any debt is in the performance
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of 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 and
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in the name of a client.


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(b) Contact m eans communications by telephone, mobile phone,
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facsimile, e-mail, autom ated call system, text messaging, or any other modes,
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or in person, including messages left for a debtor with another person or by
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voicemail or on an answering machine, or any other form of communication
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not specifically excluded, but does not include communications that the
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debtor has expressly consented to or solicits in advance.
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(c) Creditor m eans a person to whom a debtor owes a debt or who has
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extended credit to a debtor, including, but not limited to, credit in the form of
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a sale on credit, a loan of money or the provision of goods and services. It
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includes a financing company and a lending company.
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(d) Debt means a monetary obligation enforceable at law owed by a
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debtor, including, but not limited to, a purchase on credit, accounts
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receivable, a loan of money or the provision of goods or services.
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(e) Debtor means an individual who has an obligation for a debt,
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including, but not limited to, the owner of a sole proprietorship, a member of
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a partnership or an individual who has provided a personal guarantee.
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(f) Express Consent means consent in a verifiable form, including, but
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not limited to, writing and audio recordings.
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(g) Representative m eans a person, other than the debtor or creditor,
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that is duly authorized by the debtor or creditor to contact or be contacted
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and communicate with about the debt.
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Sec. 4. Acquisition of Location Information. -  Any debt collector
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communicating with any person other than the borrower for the purpose of
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acquiring location information about the borrower shall:
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(1) Identify himself, state that he is confirming or correcting location
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information concerning the borrower, and only if expressly requested, identify
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his employer;
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(2) Not state that such borrower owes any debt;
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(3) Not communicate with any such person more than once unless
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requested to do so by such person or unless such debt collector reasonably


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believes that the earlier response of such person is erroneous or incomplete
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and that such person now has a correct or complete location information;
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(4) Not communicate by post card;
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(5) Not use any language or symbol on any envelope or in the contents
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of any communication that indicates that the debt collector is in the debt
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collection business or that the communication relates to the collection of debt;
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(6) After the debt collector knows the borrower is represented by an
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attorney with regard to the subject debt and has knowledge or, can readily
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ascertain, such attorney’s name and address, not communicate with any
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person other than the attorney, unless the attorney fails to respond within a
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reasonable period of time to the communication from the debt collector.
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Sec. 5. Allowable Debt Collection Practices. -  Financing companies,
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lending companies, credit card companies, creditors, debt collectors and third
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party service providers engaged by creditors (collectively known as ‘Debt
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Collector’) may resort to all reasonable and legally permissible means to
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collect am ounts due them under the loan agreement, provided that in the
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exercise of their rights and performance of their duties, they m ust observe
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good faith and reasonable conduct, and refrain from engaging in abusive,
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unfair, and untoward acts enumerated in this Act.
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Sec. 6. Prohibition Against Harassm ent or Abuse. -  A debt collector shall
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not engage in any conduct the natural consequence of which is to harass,
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oppress, or abuse any debtor in connection with the collection of a debt.
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Without limiting the general application of the foregoing and without prejudice
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to the application of the pertinent provisions of the Revised Penal Code and
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other laws, the following conduct shall be considered a violation of this
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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
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and/or which am ount 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,
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except 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 m eans in connection
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with the collection of any debt. Without limiting the general application of the
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foregoing and without prejudice to the application of pertinent provisions of
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the Revised Penal Code and other laws, the following conduct is a violation of
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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, am ount 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
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attorney or that any communication is from any attorney;
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(4) The representation or implication that non-payment of any debt will
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result in arrest or imprisonment of any person or the seizure,
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garnishment, attachm ent or sale of any property or wages of any
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person unless such action is unlawful and the debt collector or
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creditor intends to take such action;


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(5) The use of tJireat to take any action that cannot be legally taken;
(6) The false representation or implication that a sale, referral or other 
transfer of any interest in a debt shall cause the borrower to:
(a) Lose any claim or defense to payment of the debt; or
(b) Become subject to any practice prohibited by this Act;
(7) The false representation or implication that the borrower committed 
any crime or other conduct in order to disgrace the borrower;
(8) Communication or threatening to communicate to any person credit 
information which is known or which should be known to be false, 
including the failure to communicate that a disputed debt is 
disputed;
(9) The use or distribution of any written communication which 
stimulates or is falsely represented to be a document authorized, 
issued or approved by any court, official, or agency of the 
government, national or local, or which creates a false impression as 
to its source, authorization or approval
(10) 
The use of any false representation or deceptive m eans to collect 
or attem pt to collect any debt or to obtain information concerning a 
borrower;
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Except as otherwise provided for communication, to acquire 
location information under Section 4 of this Act, the failure to 
disclose clearly in all communications made to collect a debt or to 
obtain information about a borrower, that the debt collector is 
attempting to collect a debt and that any information obtained will 
be used for that purpose;
(12) 
The false representation or implication that accounts have been 
turned over to innocent purchasers for value;
(13) 
The use of any business, company, or organization name other 
than that 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
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otherwise, any false or misleading information, including, but not
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limited to, references to the police, a law firm, prison, credit history,
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court proceedings or a lien or garnishment.
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Sec. 8. Unfair Collection Practices. -  A debt collector shall not use unfair
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or unconscionable m eans to collect or attem pt to collect any debt. The
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following conduct shall be considered a violation of this Section:
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(1) The collection of any am ount (including any interest, fee, charge or
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expense incidental to the principal obligation) unless such am ount
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is expressly authorized by the agreement creating the debt or
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permitted by law;
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(2) The acceptance by a debt collector from any person of a check or
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other payment instrum ent postdated by more than five days unless
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such person is notified in writing of the debt collector’s intent to
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deposit such check or instrum ent not more than ten (10) nor less
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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
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postdated payment instrum ent for the purpose of threatening or
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instituting criminal 
prosecution;
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(4) Depositing or threatening to deposit any postdated check or other
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postdated instrum ent prior to the date on such check or instrum ent;
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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
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charges include, but are not limited to, collect telephone calls and
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telegram fees;
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(6) Taking or threatening to take any non-judicial action to effect
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dispossession 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
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address, on any envelope when communicating with a borrower by
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use of the mails or by telegram, except that a debt collector may use
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his name if such name does not indicate that he is in debt collection
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business.
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Sec. 9. Other Prohibited Acts and Practices. -  No debt collector shall
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commit any of the following prohibited acts and practices:
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(a) Collect or attem pt to collect money for a creditor except on the belief
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in good faith that the money is due and owing by the person to the creditor;
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(b) Fail to provide a contact num ber for the debtor to call when the debt
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collector uses an autom ated call system to contact the debtor;
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(c) Collect or attem pt to collect a debt without providing the real name
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of the agent or representative of the debt collector, the contact number, the
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registered name and address of the debt collector;
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(d) Make any arrangem ent with a debtor to accept a sum of money that
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is less than the am ount of the balance due and owing to a creditor as final
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settlement 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
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person with whom the debt collector transacts with;
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(f) Make any personal call or telephone call for the purpose of collecting
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or 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
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any action for which the debt collector does not have the prior express consent
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of the creditor or for which there is no lawful authority;
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(h) Continue to collect or attem pt 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
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not the debtor, unless the debt collector first takes all reasonable
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precautions to ensure 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
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any verifiable means, including, but not limited to, personal service,
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certified mail, courier, facsimile, or e-mail, or by any other method, that
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the debt is in dispute and that the debtor wishes the creditor to take
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the m atter to court;
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(i) Contact a debtor’s spouse, relative, neighbor, friend or acquaintance
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unless the contact is limited to the purpose of obtaining the debtor’s
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residential address, personal telephone num ber or employment telephone
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number;
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0) Contact the debtor’s employer for any purpose other than to confirm
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the debtor’s employment status, business title and the address of the
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business, in preparation for legal proceedings;
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(k) Contact the debtor when he or she has notified the debt collector in
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writing to communicate only with the debtor’s representative, providing
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therein the current address and telephone num ber of the same for the
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purpose of:
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(i) Maiking reasonable arrangem ents to discuss the debt with the
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debt collector, and
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(ii) Discussing the debt with the debt collector in accordance with
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the arraingements;
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(1) 
Contact a debtor at his or her place of employment where the
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debtor has previously requested that the debt collector not to contact the
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debtor there; Provided that the debtor makes reasonable arrangem ents to
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discuss the debt with the debt collector, and discusses the debt with the debt
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collector in accordance with the arrangements;
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(m) 
Communicate information about the debt or the existence of the
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debt with any person other than the debtor, a guarantor of the debt, the


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debtor’s representative or the creditor of the debt, unless the debtor has
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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
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ensure that the debtor is aware of the identity of the original and current
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creditor of the debt and the details of the debt;
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(p) Enter into or arrange wage or salary assignm ents with a debtor or
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the employer of a debtor;
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(q) Exceed 3 unsolicited contacts on behalf of the same creditor with a
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debtor in any period of 7 consecutive days, not including contacts with a third
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party to locate a debtor, m istaken contact with a third party, or contacts by
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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
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circum stances have not changed materially, unless the debtor has
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m isrepresented the debtor’s financial circumstances.
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Sec. 10. Prohibited Agreements. -  Any agreement entered into by the
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debtor and the debt collector shall be deemed void if that agreement:
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(a) Misrepresents the rights eind powers of a person collecting or
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attempting to collect a debt;
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(b) Misrepresents the obligations or legal liabilities of a debtor; or
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(c) Is misleading as to its true nature and purpose.
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Sec. 11. Confidentiality of Information. -  Creditors shall keep strictly
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confidential the data on the borrower, except under the following
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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
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subsidiaries and affiliates;
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(c) Upon orders of a court of competent jurisdiction or any government
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office or agency authorized by law;
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(d) Disclosure by creditors to debt collectors, counsels and other agents
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to enforce their rights against the borrower; and
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(e) Disclosure to third parties, such as insurance companies, solely for
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the purpose of insuring the creditor from borrower default or other
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credit loss, and the borrower from fraud or unauthorized charges.
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Sec. 12. Issuance of Receipts. -  Every debt collector m ust acknowledge
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the receipt of all cash transactions, payments made in person, or payments
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made at the debtor’s request that the debt collector collects or receives from
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a debtor for distribution to the debtor’s creditors by m eans of receipts that
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m ust contain the following;
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(a) The date the am ount is collected or received;
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(b) The name of the debtor;
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(c) The name of the person for whom the debt collector acts on his
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behalf; and
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(d) The am ount received from the debtor.
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Sec. 13. Settlement Agreement. -  If a debt collector reaches a settlement
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agreement with a debtor, the debt collector m ust, when the am ount set out in
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the settlement agreement has been paid in full, provide to the debtor a receipt
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containing;
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(a) The am ount paid;
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(b) The name of the creditor or creditors; and
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(c) A statem ent that the am ount received is in final settlement of the
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debt or debts owing.
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Sec. 14. Request for Accounting. -  A debt collector m ust provide the
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debtor on request, with a complete accounting of all the details of the debt
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and, if such an accounting is not in the possession of the debt collector, the
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agency m ust request that the creditor provide it. If, within 30 days after
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receiving a request for an accounting of a debt collector, the creditor has not
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provided a complete accounting of the debt, the debt collector must:
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(a) Inform the debtor in writing that it cannot provide the accounting
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and the reasons for it, and
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(b) Cease all collection activity for that account and not resum e
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collection activity until the accounting is provided.
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A debtor may request a complete accounting only once every six (6)
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months, unless the debt collector fails to provide the complete accounting as
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requested.
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Sec. 15. Administrative Penalties. -  The Securities and Exchange
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Commission and the Bangko Sentral ng Pilipinas shall issue their respective
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rules and regulations for the implementation of the provisions of this Act and
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for the imposition of reasonable administrative penalties on different
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violations thereof.
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Sec. 16. Civil Liability.-
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(a) Amount of Damages. -  Any debt collector who violates any of the
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provisions in this Act with respect to any person shall be liable to such person
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in an am ount equal to the sum  of:
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(i) Any actual damage sustained by such person as a result of the
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violation;
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(ii) In the case of any action by an individual, such additional
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damages as the court may allow, but not exceeding Thirty Thousand
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Pesos (P30,000.00); or
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(iii) In the case of a class action, such am ount for each named
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plaintiff as could be recovered under paragraph (a), and such am ount
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as the Court may allow for all other class members, without regard to a
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minimum individual recovery, not to exceed the lesser of Sixty
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Thousand Pesos (P60,000.00) or one (1) percent of the net worth of the
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debt collector.
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(b) Factors to be Considered by the Court. -  In determining the am ount
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of liability in any action under paragraph (a) of this section, the court shall
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consider, among other relevant factors:
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(i) In any individual action under paragraph (a) (ii) of this section,
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the frequency and persistence of non-compliance by the debt collector,
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the nature of such non-compliance, and the extent to which such non-
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compliance was intentional, or
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(ii) In any class action under paragraph (a) (iii) of this section, the
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frequency and persistence of non-compliance by the debt collector, the
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nature of such non-compliance, the resources of the debt collector, the
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num ber of persons adversely affected, and the extent to which the debt
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collector's non-compliance was intentional.
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(c) Intent. -  A collector may not be held liable in any action brought
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under this section if the debt collector shows by a preponderance of evidence
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that the violation was not intentional and resulted from a bona fide error in
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good faith.
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(d) Jurisdiction. -  An action to enforce any liability created by this Act
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may be brought in any appropriate court using as jurisdictional basis the
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am ount of debt involved.
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Sec. 17. Separability Clause. -  If any provision of this Act is declared
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invalid or unconstitutional, the provisions not affected thereby shall remain
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in full force and effect.
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Sec. 18. Repealing Clause. -  All laws, presidential decrees, executive
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orders, presidential proclamations, rules and regulations or parts thereof
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contrary to or inconsistent with this Act are hereby repealed or modified 
accordingly.
Sec. 19. Effectiuity. -  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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