QuestionsQuestions (Republic Act No. 3765)
The State aims to protect citizens from lack of awareness of the true cost of credit by assuring full disclosure of such cost, to prevent uninformed use of credit to the detriment of the national economy.
“Credit” includes loans, mortgages, advances/discounts, conditional sales contracts, contracts to sell/sale of property or services where payment is deferred, rental-purchase contracts, hire/bailment/leasing arrangements, liens/pledges/other claims for delivery of property or money, credit upon security of obligations, and transaction/series of transactions with similar purpose or effect.
“Finance charge” includes interest, fees, service charges, discounts, and other charges incident to the extension of credit as the Monetary Board may prescribe by regulation.
Any person engaged in business extending credit, including those who as a regular business practice make loans or sell/rent property or services on time/credit/installment basis, either as principal or as agent, and who require the payment of a finance charge.
Each person to whom credit is extended must be furnished with the required clear written statement prior to the consummation of the transaction.
The cash price or delivered price of the property or service to be acquired (to the extent applicable and as required by Board rules).
The amounts, if any, to be credited as down payment and/or trade-in.
The difference between the cash/delivered price (clause (1)) and the amounts credited as down payment/trade-in (clause (2)).
Charges paid or to be paid by the person in connection with the transaction but which are not incident to the extension of credit must be individually itemized.
The “total amount to be financed” must be stated in the clear written statement.
It must be expressed both (1) in pesos and centavos, and (2) as a percentage that the finance charge bears to the total amount to be financed, expressed as a simple annual rate on the outstanding unpaid balance of the obligation.
The Board shall prescribe rules and regulations necessary or proper to carry out the Act, including classifications and differentiations necessary to effectuate the purposes, prevent circumvention/evasion, or facilitate enforcement.
The creditor is liable to the person in the amount of P100 or an amount equal to twice the finance charge required, whichever is greater, but not exceeding P2,000 per credit transaction.
An action to recover the penalty may be brought within one year from the date of occurrence of the violation.
Except as specified in the civil penalty provision, nothing in the Act affects the validity or enforceability of the contract or transaction.
A fine of not less than P1,000 nor more than P5,000 and/or imprisonment of not less than 6 months nor more than 1 year, or both.
No. The Act provides that no punishment or penalty shall apply to the Philippine Government or any agency thereof, or any political subdivision thereof.
Such final judgment is prima facie evidence against the defendant in a later civil action by any other party under the Act, as to all matters respecting which the judgment would be an estoppel as between the parties.