New credit card law rules to protect cardholders

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The new rules on credit cards issued by the central bank will implement a law enacted two years ago.

Metro Manila (CNN Philippines, May 4) — Credit card users will now have more protection while card issuers are required to be more transparent under new rules issued by the central bank to implement a law enacted two years ago.

The Bangko Sentral ng Pilipinas (BSP) on Friday said the Monetary Board approved the Implementing Rules and Regulations (IRR) for the Credit Card Industry Law or Republic Act 10870.

"The IRR addresses the key customer concerns regarding credit cards, particularly on the transparency and manner of computing charges and fees, safeguards against unfair collection practices, immediate posting of payments, confidentiality of consumer data, and expeditious resolution of complaints and disputed transactions, among others," the BSP said in a statement.

The central bank said credit card issuers should be transparent in the manner of computing finance charges and fees, including prior notification if there would be changes in the charges.

The disclosures shall be in application forms, the terms and conditions of credit card contracts, and billing statements.

It said finance charges shall be computed on the unpaid amount of the outstanding balance as of statement cut-off date, and shall not include current and deferred charges. Card issuers are also required to post cash, check, and debit card payments on the same day. Due dates falling on weekends or holidays, it added, shall be automatically moved the next business day.

The BSP said the rules also strengthened prohibitions against unfair collection practices.

"Collection agents must observe good faith, fair and reasonable conduct, and proper decorum when dealing with all consumers, including cardholders already in default," it said.

The monetary regulator said the rules strengthened data privacy provisions, as customer information may not be shared to third parties without consent.

Banks must also address credit card concerns, such as billing errors, unauthorized transactions and other credit card related issues, within 90 days from receipt of the concern.

"The IRR contemplates a phased implementation of some provisions to account for the necessary adjustments in the systems and processes of existing credit card issuers," the BSP said.

It said there are more than eight million credit cards issued in the country, and it sees the industry growing because of economic growth, demographics and increasingly digital payment system.