BSP issues new rules to protect credit cardholders, spur entry of new players

CONSUMER FRIENDLY. The new regulations aim to make credit card readily available and easier to use for the consumer public.

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MANILA, Philippines— The Bangko Sentral ng Pilipinas (BSP) has issued new rules for credit card issuers  that gives customers more protection while also opening up the market to potential new players.

The BSP Monetary Board announced on Friday, May 4, that it has approved the implementing rules and regulations of the Philippine Credit Card Industry Regulation Law which "aim to make consumer credit readily available under conditions of safe, sound, efficient, and fair business conduct aligned with global best practices."

The IRR  also provides the framework for the entry of new players in the credit card business beyond banks, their affiliates, and subsidiaries.

“Opening up the market to a wide range of players can lead to more transparent and competitive interest rates, innovative products and improved services,” the BSP said.

“At present, there are more than 8 million credit cards issued in the country. There is further potential for expansion in light of the current economic growth, the country’s demographics, and the increasingly digital payment system,” it added.

New rules

The rules require all credit card issuers to fully disclose, in an understandable way, how it computes finance charges and other fees related to credit card use, and to provide ample notification to customers before implementing any changes in the charges.

The rules also state that the finance charges shall be computed based on the unpaid amount of the outstanding balance as of statement cut-off date, and shall not include current and deferred charges.

The central bank noted that prohibitions against unfair collection practices have been strengthened under the new rules.

One example is that payments using cash, checks, or debit cards made through any accredited payment center shall be posted on the same day by credit card issuers. The new rules also provide that due dates falling on weekends or holidays shall be automatically moved to the next business day.

Under the new rules, collection agents must also observe good faith, fair and reasonable conduct, and proper decorum when dealing with all consumers, including cardholders already in default.

The new regulations also address customers privacy concerns  wherein their information can only be shared to 3rd parties upon a cardholder’s informed consent, and under specific conditions defined by the law.

The new regulations also mandate that credit card issuers address cardholders’ concerns, such as billing errors and unauthorized transactions within 90 days from receipt of the concerns.

The BSP pointed out that the new rules provide for  phased implementation of some provisions, to allow for the necessary adjustments in the systems and processes of existing credit card issuers. – Rappler.com