Fintech firms adopt code of conduct after spate of online shaming incidents
MANILA, Philippines – Government regulators and agencies, and financial technology (fintech) trade association FinTechAlliance.ph formalized the adoption of a code of conduct for “responsible online lending” on Monday, September 16.
The move was made in response to a spate of harassment complaints made to the National Privacy Commission (NPC) against online lenders that resort to harassing borrowers when they are unable to pay in time. When a borrower isn’t able to pay in time, the lenders text or call a borrower’s contacts in their phone, stating their full name and outstanding balance.
A recently concluded investigation by the NPC led to formal charges against 3 of these companies for violating statutes of the Data Privacy Act of 2012. The regulator found the companies "have not complied with legal requirements for processing personal data; failed to adhere to the principles of transparency, legitimate purpose and proportionality; and committed unauthorized processing; processing for unauthorized purpose; malicious disclosure; and unauthorized disclosure."
With an ethics code in place, the stakeholders aim to prevent such incidents in the future. It specifically asks lenders to “use professional and non-abusive collection practices,” prevent excessive disbursement of loans, promote responsible credit use, as well not to share personally identifiable information.
“[The code] sets industry standards in promoting transparency and would protect the customers from any possible malpractices and other unethical actions by any fintech player,” FinTechAlliance.ph says in a statement.
Some of the alliance members are Grab, PayMaya, Smart, and RCBC.
The code is also all-encompassing, providing guidance not just for online lending but for fintech company behavior. NPC commissioner Raymund Liboro described its establishment as a milestone that casts “the widest net for consumer protection in tech driven financial services.”
The other partner agencies in the adoption of the code include the Bangko Sentral ng Pilipinas, Securities and Exchange Commission, Anti-Money Laundering Council Secretariat, Bureau of Internal Revenue, Department of Trade and Industry, and the Insurance Commission. – Rappler.com