TARLAKENYO – The Securities and Exchange Commission (SEC) has penalized HC Consumer Finance Philippines, Inc., popularly known as Home Credit, for employing unfair debt-collection tactics.
The corporate regulator slapped the financing firm with a PHP50,000 fine after it conducted collection efforts at a third-party residence occupied by individuals who were never declared as guarantors or co-makers of the loan.
While Home Credit does not publicly disclose a granular breakdown of its borrowers by specific city or province, the company has served over 12 million customers nationwide. It maintains a heavy presence in the province through active retail networks like those in Tarlac City, Capas, and Paniqui.
According to a statement from the SEC on Wednesday, its Financing and Lending Companies Department found Home Credit liable for violating SEC Memorandum Circular No. 18, series of 2019, alongside the implementing rules of the Financial Products and Services Consumer Protection Act (FCPA) of 2022.
The penalty stemmed from a formal complaint lodged by a borrower, who revealed that Home Credit targeted an undeclared third-party address for its collection activities. The complainant noted that the company stubbornly persisted with the practice despite receiving a written objection.
In its ruling, the commission emphasized that using an unrelated third-party residence as a venue for collection naturally creates a substantial risk that the borrower’s debt, financial status, or delinquency will be exposed to people who have no lawful interest in the transaction. The SEC pointed out that this specific type of exposure is exactly what the FCPA and existing memorandum circulars aim to prevent.
The regulatory body concluded that the totality of evidence proved Home Credit crossed clear, non-waivable legal boundaries under the pretext of enforcing a valid obligation.
Beyond the monetary fine, the SEC ordered Home Credit to immediately review and overhaul its collection policies and procedures, and subsequently submit a compliance report to the commission.
