May 16, 2011
There were 2 things that finally triggered me to write my sentiments about credit card
and bank debt and how they draw blood from poor filipinos today. The first one is
about a a newspaper article I read today in Philippine Star page D-1 in Business as
Usual section titled " Get your Dream vacation in as fast as 2 hours" the other thing
was a demand letter coming from the lawyers of HSBC asking my officemate to pay
them ASAP or else they might file a court case to be able to collect the debt.
Let me tell you about myself. Im a company President of a medium size enterprise and
over the years I am a personal witness to my employees experiencing debt problems
that should have been totally unnecesary and which money could have been spent on
something more important such a their children's education or food for the table. Every
month I have lectured my people on the importance of responsible and prudent financial
discipline only to fall trap to what I say a deceptive credit card practices bordering on
scams. I have decided to write this blog in the hope that others would read this and
probably help me promote responsible financial management among filipinos. For some
filipinos, the money that they owe this companies, they have to pay with blood and tears
at the expense of more important family expenses like food, shelter and education. I hope
that more people join the crusade of helping put a stop to this unscrupolous practices.
Let me first discuss the article authored by Patricia Esteves of Philippine Star dated May
16, 2011 on page D-1. It shows a smiling Citibank Savings President Tonet Itchon.
Then the article discusses a scenario where you just saw an ad about going to Italy but
you don't have money, but you are expecting a bonus 6 months from now, so the article
say that your problem is solved and apply a loan for you to have a vacation to Italy.
Wow! for a company president this guy Tonet Itchon is really teaching the filipinos the
wrong values.Why is the article wrong in my point of view? Instead of encouraging
Filipinos to save for the rainy days, companies like Citibank Savings are telling us to
" go ahead and make a loan against your future earnings and splurge it on a vacation. "
Instead of telling filipinos to be frugal and thrift, they are telling us to splurge and incur
debt. This is greed to the highest level! Teaching us the wrong values just so that they
will make money!
The second thing that happened today that triggered me to write this blog was the
demand letter coming from the lawyers of HSBC addressed to our administrative
officer. It states that if he does not pay the loan , they will be constrained to file
all necessary action in court to be able to collect. The debt can be broken down
as follows, total P63,836.45 broken down to agency/collection fees P12,767.29,
Interest and Late Fees P31,471.21 and Remaining balance of P19,597.95.
Let me tell you about our administrative officer. He is a very responsible person. He
started out as a company driver. His highest educational attainment is an elementary
school graduate. But he is a hardworker and he is a responsible family man, providing
his kids with food in the table and sufficient shelter and a decent education. He was
promoted from driver to Sr. driver to eventually admin officer. So I asked him how he
incurred a debt with HSBC totalling P63,836.45? And he said that it was because, he
was approached by an HSBC agent offering him a cell phone if he gets a credit card. He
asked if there was any obligation and the agent said none. All he has to do is get an
HSBC credit card. So he got one. he did not read the fine print, and even if he did,
he probably would not understand because it was written in english. So because of
the P4,000 cellphone that he got he is now P63,836.45 in debt. He honestly though
that the cellphone is for free. The HSBC agent misrepresented himself and now he is
deep in debt.
Our admin officer, because of fear decided to settle his account which he neglected to do
the past 10 months. Do you know what it will cost him to settle his debt? It will cost him
his childrens education. The money that he earnmark for tuition fees for his 3 children for
2011-2012 will instead be used to pay his P63,836.45 debt. His children will not be
able to go to school this year, all because an HSBC agent tricked him and did not
fully explain to him his obligation if he avails of the free cellphone. His children will not
go to school this year and probably go hungry because credit card companies are
like leeches and vultures living off the blood of poor and innocent filipinos. His children
will not go to school and get wet this year because he no longer has the money to
fix their shanty that leaks when it rains . The money that he religiously saved over the
year through hardwork, blood, sweat and tears is no more because of the cellphone
bait that credit card vultures and leeches are dangling on unsuspecting
filipinos. Do you know what the market value of the cellphone he got was?
P4,000. In 10 months the cellphone that he got for P4K, got him into a P64K debt.
That is the magic of financial wizardry that this credit card companies are sucking the
blood of the poor and uninformed filipinos.
Let us encourage our friends working in credit card companies to highlight the pitfalls
and dangers of falling in a debt trap. Let us encourage people we know working for
this companies to be very prudent in issuing credit cards. I know for a fact that credit
card companies would gladly offer you a credit card with a P30,000 credit limit even
if you only get a gross pay of P12,000/month. They entice you with an interest of 3%
per month (already very high) without telling you that if you miss payment for even a
P100 peso debt, your interest payment will balloon to an usurious level of up to 8%
per annum with all the penalties. Let us encourage our friends working in the government
specially in DTI and central bank to promote policies that will prevent uniformed and
uneducated filipinos fall into a debt trap.
Juan Dela Cruz
