Acts Tantamount To Issuing Pre-Approved Credit Cards
- Sending credit cards without prior application or supporting documents required for credit evaluation.
- Sending unsolicited supplementary or additional feature cards not as replacements.
- Unsolicited calls requesting updated information promising credit card rewards without application.
- Informing depositors by unsolicited calls that credit cards have been issued due to good standing.
- Sending credit cards through mail deemed accepted upon receipt, regardless of authorization.
- Sending unsolicited credit cards deemed accepted unless the cardholder requests termination promptly.
- Offering credit cards as free offers to consumers availing other financial products.
- These acts are included as Appendices 103, Q-61, and N-10 under MORB and MORNBFI regulations.
Prohibition and Regulatory Authority Over Issuance of Pre-Approved Credit Cards
- Banks, quasi-banks, non-bank financial institutions (NBFIs), and their affiliates or subsidiaries are prohibited from issuing pre-approved credit cards.
- This prohibition is mandated under MORB Subsection X320.3 and MORNBFI Subsections 4320Q.3 and 4301N.3.
- Any contractual stipulations that contradict this prohibition are overridden by the regulations.
Implementation and Effectivity
- The Circular, including the amendments in MORB and MORNBFI, took effect 15 days after its publication.
- It applies to all BSP supervised financial institutions engaged in credit card operations.
Important Legal Concepts
- Emphasis on consumer consent and documented application for credit cards.
- Clear distinction between solicited applications and unsolicited/pre-approved issuance.
- Regulatory definitions and appendices formalize acts equivalent to issuing pre-approved cards.
- The Circular reinforces consumer protection against unsolicited credit card issuance by financial institutions.