Credit card issuers in the Philippines no longer are allowed to issue pre-approved credit cards, the Bangko Sentral ng Pilipinas ruled via a circular dated Dec. 20. The central bank also directed credit card issuers to inform cardholders seven days in advance before their delinquent accounts are sent to collection.

These changes were among the amendments approved by central bank’s policy-making Monetary Board to protect credit cardholders.

Regarding preapproved cards, “cards sent either through the mail or delivered by courier have exposed the public to cases of fraud via unauthorized use of” the cards, the central bank noted.

“The notification requirement, which should include the full name of the collection agency and its contact details, is expected to also give cardholders enough time to consider whether it will be advantageous for them to settle before their accounts are endorsed to collection agents,” the circular said.

The bank also directed issuers to disclose the names of their collection agents “to address mounting complaints regarding unfair collection practices by some collection agents.”

In addition, the circular laid out the standards for disclosure requirements. Issuers now must use at a minimum Arial 12 theme font size in printed documents noting the table of the applicable fees, penalties and interest rates on credit card transactions. This table must be included in all marketing materials and in the billing statements, and it will have to include the manner of and reason for the imposition of such penalties, fees and applicable conversion reference rates for third currency transactions.

Issuers also must continually remind cardholders via their billing statements that paying only the minimum amount due or any amount less than the total amount in a particular billing cycle “would automatically mean the imposition of interest and other charges.”

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