Picture this. Assigned bank officers from 38 universal and commercial banks enter names of erring borrowers into their negative lists, send these files to the Bankers Association of the Philippines on a regular basis via file transfer protocol, and the BAP sends the file back to the banks so they can use the database for deciding whose credit application to approve or to junk.
Frightening? What really goes on after these files are modified? Too many points for human errors and no way yet for individual borrowers to conveniently check whether they have hits on their names and whether the hits are justified. That’s why everybody’s waiting for the credit bureau, where transparency will make it possible for people to check their credit score.
I got this email from a reader who is concerned about a hit on his name and interviewed Topper Coronel, executive director of the BAP, to clear things up. The email sender’s name has been changed upon his request.
Ms. Salve,
I would like to pose some questions regarding your article posted on the Inquirer dated July 14, 2008 about the negative list of BAP. The questions I have are as follows:
1. What is the control mechanism of BAP to ensure that the appropriate individuals are in the negative list? What is stopping anyone who works in a bank to have your name placed on that list?
Topper Coronel: The BAP Credit Bureau is just the repository of information. That means garbage in, garbage out. The banks themselves make the list. However, there are only several bank officers within a bank who are specifically authorized to modify that list and they are responsible for its reliability. They can get sued for mistakes. We are not worried about the accuracy of these lists. We are not dealing with kids here.
2. I assume there are triggers for people to be listed. What are the triggers/limits? Does it start when you fail to pay the credit card bill on time?
TC: Yes, there are triggers for people to be listed and these are agreed upon by participants of the system. These include canceled credit cards due to improper usage, not voluntary cancellation. Even when the credit card falls past due, it is not immediately placed on the list. We make allowances for curable periods where a borrower might have merely forgotten to pay.
3. You mentioned that once you are on the list, you would be there forever. What if somebody made a mistake and placed you there? What if it was not you but another person with the same name?
TC: Banks as a rule look at the total credit history of a person. If you have a cancelled credit card or a bounced check but have paid the amount already, it is the obligation of the bank to make a notation that you have rectified the situation.
Personally, my advice is to deal with banks that know their business. If I were a bank, I would rather deal with someone who has had bad experiences with credit but got burned and has reformed, rather than someone who is spotless. Those who process credit applications and reject someone right away because of some bad decisions are lazy and are not doing justice to the bank. We are not dealing in heaven where there are only spotless angels.
Also, good banks invest in good systems. There are algorithms that check not just the name but also the address, birthday and other personal details. The BAP’s system can check details like middle names. We have enough safeguards to make sure we don’t make mistakes and ruin people’s lives. Our system can only be accessed by two or three very senior people and it is fully audited and fully secure.
As background, I applied last year for a credit card in another bank since I wanted to try their services and got denied. So I started to ask myself why I got denied and the only explanation was this bank was using the negative list. I already have new credit cards with two other banks but I feel pretty offended that I am on that list.
My annual salary was 15x their minimum limit. All of my credit cards including my wife’s were always paid in full. Obviously, like most busy couples we would miss payment once or twice but made sure we paid full and then some once we remembered it was the cut-off. Our home and cars are also not mortgaged. We also asked all the banks that we had credit cards from to give us a certification that we do not have any arrears. So what gives? I think somebody made a foolish mistake and placed us on that list.
TC: The best way to check would be to write a letter of request to the BAP and we can check the system for you. Then we can tell the bank to review their records.
Please feel free to post this message in anonymity but I am willing to be identified if this message will be forwarded to BAP. I appreciate your article and I hope this message will fix those who were placed inadvertently or avoid any future errors.
kind regards,
Juan Cruz
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11 Feedbacks on "Human errors in banks’ negative lists"
sunjun
For this reason it might be good to be extra nice to bank personnel hehehe ^^
Or why not just make it a point to be extra nice to everyone! ^^
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Maan
I guess this shows that we really need to have the Credit Info Systems Act passed in its original form. I could understand both sides of the coin - the client and the bank.
With a proper Credit Bureau functioning like in other countries, the customer will know what is written in the credit report and has a chance to refute if wrong.
The properly functioning CB will I believe, improve the credit structure of the country. Consumers will be careful in incurring overdue payments for his credit score will definitely be affected.
I never applied for a credit card in this large bank but I keep getting bills so I complained and they stopped. After a year the bills kept coming so I then complained and asked a letter saying they made a mistake. The bills stopped. Recently however, I keep getting bills monthly! I was a former banker. I could have the option to disregard this but I know that if I do, they might give this acount to the lawyer ad file a case. Of course in the end they will be proven wrong as the card was inexistent. I wouldnt like to suffer the aggravation for something not my doing.
Antonette Reyes
My husband has the same bad experience, but the thing that really gets my gall was that it was the bank’s stupidity that got him there in the first place. More than 10 years ago, he decided to cut his Bankard credit card which was charging him an annual fee because he had too many cards already. The card was cancelled but we continued to receive the statement, with interest to boot. The customer service representative told us to ignore this. This went on for two years. This was in 1998. Ten years later, my husband is already on the negative list, despite a very clean record. He cannot even open a savings account! We had to look for what caused this. Bankard, now owned by RCBC, has since issued a certification that he has settled his debt — what debt?
Definitely, we need that credit bureau.
paetechie
I know how it feels to be denied credit card applications; it happened to me without any explanation from the would be issuer
up to now, i still don’t have that plastic; i’m just using my wife’s card for i don’t buy too many things
sherwin
I re applied for a BPI credit card after almost 8 years after paying P30k of debt and interest that is due to my Brother who used my card instead
now, I got denied still by the same bank. even if my financial records and capability to pay are clean on all documents.
am still waiting for my BDO and HSBC status… If I get denied too.. that means I’m on the neg list.
too bad… for them
might as well use the refillable Visa/Mastercards If they have it here in the Phil.
Nick
Hi Ms. Salve.
A few years back, I used to have credit cards and used to be late in payment for my dues, until such time that I defaulted in my payment. The credit card companies demanded for the full payment of my accounts. But I was able to negotiate with them for installment payment of my outstanding balance. Early this year, I was able to fully-paid my accounts. I tried to apply for a new credit card. But as I have expected, I was denied by the credit card company. Perhaps my name is in the Negative List. As the discussion above, the banks should re-consider clients who had bad experience on credit and have already reformed. Is there such a way that my name be sorted out from the clients who has not yet paid their outstanding balances? For how many years will the names be cleared from the negative list after paying their outstanding balances? To whom and what is the address where I can write in BAP to verify if my name is still included in their negative list?
Thank you very much.
Nick
acn
it pays to personally know the bank manager.. =P
Salve
@Maan, I am very, very curious what happened to your case. I think this is a very peculiar one, but I would definitely not want to be in your shoes! Imagine getting billings for a card you do not have. So, what happened?
Salve
Hi Antonette! I suggest you talk with Topper Coronel of the BAP. What a horrible thing to happen to you and your husband!
Salve
Hi Nick and others who need to get in touch with the BAP, here are their contact details:
11/F Sagittarius Bldg., HV dela Costa St.
Salcedo Village, Makati City
Tel. No. (632) 810-3859
Fax No. 810-3860
As another option, you may want to let the Bangko Sentral ng Pilipinas know about your concerns:
Financial Consumer Affairs Group
Central Supervisory Support Subsector
Bangko Sentral ng Pilipinas
5th floor Multi-Storey Building
BSP Complex, Ermita, Manila
Telephone Numbers:
Trunk Line: 524-7011, extension nos. 2584 and 2780
Direct Line: 523-3631
E-mail Address: consumeraffairs@bsp.gov.ph
MS. ELVIRA E. DITCHING-LORICO
Head
Hope this helps!
g
hello salve.
more bad stories that refute what the person in the article said.
my sister applied for a loan in a bank. She got denied as they informed her she had a bad credit history with the then PCI bank. My sister has never owned a credit card and had never taken out a loan before. The person who had a bad credit rating had her same name and family name (presumably) but i don’t think she had the same middle name nor the same birthday. And that person was from another province!
I’m wondering if the BAP is accurate in their lists as they would want us to believe!
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