MANILA, Philippines - If your credit card debt is piling up and you're having difficulty paying it, chances are you've had to deal with collection agents.
But before you start negotiating with a collection agent on a repayment scheme, here are some reminders from the Bangko Sentral ng Pilipinas.
The BSP said it has recently received complaints and inquiries from the public regarding credit card debt restructuring. This is why it issued an advisory on the the authority of external collection agencies to offer and approve debt restructuring of credit card debt.
The BSP said credit card issuers typically refer "problem credit card accounts" to accredited external agencies for collection. They are not employees of the credit card issuer, but are authorized to collect on its behalf.
"Accounts referred to collection agencies which are restructured often result in complaints on unfair collection practices due to lack of awareness of credit card holders on the extent of the authority of external collection agents to negotiate for debt restructuring," the BSP said.
The BSP said it received complaints regarding the inconsistency between the terms of payment offered to the credit cardholder by the collection agents, and the actual terms approved by the credit card issuer.
The central bank also noted some external collection agencies try to pressure credit cardholders into paying just any amount, even though this amount has not been approved by the credit card issuer.
Collection agents are only authorized to negotiate for repayment schemes based on specific guidelines set by the credit card issuer, the BSP said.
"Only the credit card issuer can give the final approval of any type of repayment scheme reached with a collection agent, which is supported by a conforme letter and/or a promissory note.This must be signed by both the credit card issuer and the cardholder," the BSP said.
The BSP also said credit cardholders do not have to give any payment prior to negotiating for a repayment scheme.