Byline: LEE C. CHIPONGIAN

The Bangko Sentral ng Pilipinas (BSP) has ordered banks and financial institutions with credit card businesses to regularly update borrowers' credit card or loan status to correct previously "adverse" information on the borrowers.

The BSP's Monetary

"Banks/financial institutions (Fls) which have provided adverse information, such as the past due or litigation status of loan accounts, to credit information bureaus, or any organization performing similar functions, (will) submit monthly reports to these bureaus or organizations on the full payment or settlement of the previously reported accounts within five (5) banking/business days from the end of the month when such full payment was received," the circular said.

"For this purpose, it (will) be the responsibility of the reporting bank/Fls to ensure that their disclosure of any information about their borrowers/clients is with the consent of borrowers' concerned," the paper added.

The BSP receives thousands of complaints every month about banks declining loan applications due to bad credit records, which some banks do not -- for reasons of their own and most blame the Bankers Association of the Philippines for this -- update or correct once the credit card loans have been fully paid.

Sources blame the BAP for maintaining a system of records that will forever retain once-delinquent credit card borrowers' names that will be blacklisted for a long, long time.

Two years ago, the Monetary Board also took action against credit card companies implementing unfair collection practices to protect credit consumers.

Unknown to many the BSP is implementing a set of rules that will curtail abusive, unfair and outrageous practices by banks, their credit collection agencies and counsel. These include the use of obscenities, insults or profane language, which amount to a criminal act or offense under applicable laws. Sanctions will be slapped against banks violating the BSP policy.

In 2005, the Monetary Board expanded the coverage of Circular 398, on the rules and regulations that govern credit card operations of banks, subsidiaries and affiliate credit card companies, collection agencies, counsels and other agents are disallowed from the use of threat of violence or other criminal means to harm the physical person, reputation or property of debtor or credit card consumer.