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BSP Clarifies Existing Regulations Prohibiting the Issuance of Pre-Approved Credit Cards

08.27.2014

The Bangko Sentral ng Pilipinas (BSP), in its Resolution No. 1055 dated 02 July 2014, approved the issuance of a Circular to clarify existing regulations prohibiting the issuance of pre-approved credit cards, pursuant to BSP Circular No. 702, Series of 2010.
 
The Circular seeks to clarify what constitutes pre-approved credit cards. A pre-approved credit card is an unsolicited credit card issued by credit card issuers to consumers who have not applied for such credit card.  “Application” has likewise been defined as a documented request of the credit card applicant to a credit card issuer for the availment of a credit card. The intention and consent for the availment of the credit card must be clear and explicit.

The Circular enumerates the acts tantamount to the act of issuing pre-approved credit cards. These include unsolicited calls by the bank to its depositors informing that they already have a credit card from its Credit Card Department due to good standing as a depositor or sending of unsolicited supplementary cards and other cards with added features which are not in replacement or substitute to an existing cardholder’s initial credit card. Moreover, some credit card issuers sought to legitimize the issuance of pre-approved credit cards by contract stipulations on the issuance of additional cards depending on the credit consumption and the payment history of the user. This practice shall be discontinued by having the provisions of the Circular prevail over any contrary stipulations in the contract.

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