MANILA — The Securities and Exchange Commission (SEC) has imposed a PHP50,000 fine on HC Consumer Finance Philippines Inc., or Home Credit, for what it described as unfair debt collection practices involving the use of individuals not named as guarantors or co-makers in loan agreements.

In a statement on Wednesday, the SEC said its Financing and Lending Companies Department found the firm liable for violating SEC Memorandum Circular No. 18, series of 2019, as well as rules implementing the Financial Products and Services Consumer Protection Act (FCPA) of 2022.

The case stemmed from a complaint filed by a borrower who alleged that the company conducted collection efforts at a third-party residence occupied by persons who were not declared as guarantors or co-makers in the loan contract.

The borrower also claimed that the practice continued despite a written objection.

In its ruling, the SEC said “the use of a third-party residence as a collection venue necessarily creates a substantial risk that the existence of the debt, the borrower’s financial condition, or the fact of delinquency will become known to persons who have no lawful interest in the transaction.”

“Such exposure is precisely what the FCPA, MC 18, and MC 5 seek to prevent,” it added.

The commission further said that “[t]he totality of the evidence on record establishes that [HC Consumer Finance], under the pretext of enforcing a valid obligation, transgressed the clear and non-waivable boundaries imposed by law on the manner of debt collection.”

Aside from the fine, the SEC ordered the lending firm to review and revise its debt collection policies and procedures and to submit a compliance report to the commission.