SEC imposes fine against Global Dominion for abusive debt collection

​The Securities and Exchange Commission (SEC) has imposed a penalty on Global Dominion Financing, Inc. for engaging in unfair abusive debt collection practices

In an order dated January 28, the SEC Financing and Lending Companies Department (FLCD) found Global Dominion to have violated Section 1 (A), (B), and (H) of SEC Memorandum Circular (MC) No. 18, Series of 2019, and Section 4.4(A), (B), (H), and (I) of the implementing rules and regulations of Republic Act No. 11765, or the Financial Products and Services Consumer Protection Act (FCPA).

The company was ordered to pay an administrative fine of P50,000 and admonished to strictly comply with the fair, lawful, and consumer-protective debt collection standards, with a warning that repetition of such acts will be dealt with more severely, and may warrant higher monetary penalties, suspension, or revocation of its certificate of authority.

MC 18 and the FCPA provides for acts that constitute abusive and unfair debt collection practices which include the use or threat of use of violence, or other criminal means to harm a person, reputation, or property of any person; use of insults or profane language to abuse the borrower; and contacting the borrower’s contact list, other than those names as guarantors or co-makers, among others.

The order stemmed from a complaint filed by a borrower who claimed to have been subjected to unfair collection practices from the financing firm’s third party collection agents due to payment delays.

Such practices included intercepting him on the road to demand payment, and sending him a series of text messages and communications exerting pressure for the immediate payment of partial amounts, intimating adverse consequences in the event of non-cooperation, among others.

According to FLCD, intercepting the borrower on the road in the absence of a court order or other lawful authority is not a legitimate collection practice and has the tendency to intimidate, restrain, or coerce.

Meanwhile, the text messages and communications sent to the complainant were deemed to be tantamount to pressure intended to deter regulatory recourse and undermine consumer protection mechanisms.

“[Global Dominion] cannot evade administrative accountability by attributing the prohibited acts to collection agents or third-party providers,” the order read.
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“This allocation of responsibility accords with the FCPA IRR framework, recognizing solidary responsibility/solidary liability for regulated entities and their accredited third-party service providers engaged in marketing and transacting with financial consumers,” the order read.