Manila: Senate President Pro Tempore Jinggoy Ejercito Estrada has advocated for a ban on the issuance of unsolicited pre-approved credit cards and proposed stricter penalties for violators. Estrada’s initiative comes in the form of Senate Bill No. 2952, known as the Pre-Approved Credit Card Prohibition Act, which he filed last month.
According to Philippines News Agency, Estrada highlighted that despite the Bangko Sentral ng Pilipinas (BSP) having prohibited the practice through Circulars Nos. 702 (2010) and 845 (2014), some financial institutions continue to issue pre-approved credit cards without consumer consent. This practice, he noted, exposes individuals to unwanted financial liabilities and potential fraud. Estrada expressed concern that consumers often remain unaware they are being issued a credit card without their consent, potentially trapping those with financial discipline issues into debt.
The proposed bill aims to bolster consumer protection laws by making it illegal for banks and financial institutions to issue pre-approved credit cards without explicit consent. The bill outlines prohibitions against various practices, such as issuing pre-approved cards without a prior application or written request, sending unsolicited supplementary cards, offering cards as rewards for using other financial products, and sending cards via mail that are deemed accepted upon receipt unless activated by the recipient. Furthermore, the bill seeks to prevent unethical tactics by credit card collection agents in pursuing payments from consumers who unknowingly receive pre-approved cards.
To enforce compliance, Estrada’s bill suggests penalties for issuers who violate the ban. These penalties include a censure and a fine of PHP300,000 for a first offense, suspension from BSP credit facilities and a fine of PHP500,000 for a second offense, and license revocation and a fine of PHP800,000 for a third offense. Estrada stressed the importance of credit card providers proving that a consumer has read and consented to the terms before issuing a card, ensuring that consumers are not bound by financial obligations without informed consent.
Estrada stated that the bill aims to hold credit card issuers accountable for their actions, promoting ethical business practices and financial transparency. The initiative aligns with Article XVI, Section 9 of the 1987 Constitution, which mandates consumer protection from trade malpractices, and Republic Act No. 7394, the Consumer Act of the Philippines, which ensures protection against deceptive and unfair sales practices.
