Solon seeks to ban pawning ATM cards

December 20, 2021 Admin

Solon seeks to ban pawning ATM cards

Pawning of Automated Teller Machine (ATM) Card is a loan transaction where the debtor gives his/her ATM card to the creditor to secure the payment of loan obligation.

For many months, we have seen unsettling news about how money lenders take advantage of borrowers by requiring them to surrender their ATM payroll cards or their government benefits cash card as collateral for loans.

The practice ‘ATM Sangla’ Scheme has become widespread that various government agencies express concern.

On April 18, 2020, the Department of Education issued a Memorandum order OM-OSEC2020-006, reminding all DepEd employees to refrain from using ATM payroll cards as collateral for loans or engaging in the ‘ATM Sangla’ Scheme or ATM Card pawning.

It was reported that countless of our beloved teachers are forced to surrender their ATMs to money lenders as collateral.

The PNP also implemented the Guidelines and Procedures in the Handling of Mandatory ATM Pay and Allowances Accounts of PNP Personnel with the Landbank of the Philippines under PNP Memorandum Circular 2014-004.

It said that the individual ATM cards of PNP members are part of their uniform, non-transferable, and “should be surrendered only upon retirement or separation from the service.“

PNP personnel who failed to observe the said memorandum circular will be liable for breach of internal discipline which is tantamount to suspension. PNP personnel penalized for administrative cases (suspension) or serving penalty are not entitled to receive bonuses (mid-year, year-end, etc.) on that year.

The controversial issue that has been going on recently is the 4Ps Sangla Scheme where beneficiaries of 4Ps pawn their cash cards as collateral for loan obligation from unregulated money lenders.

Representative Virgilio S Lacson of the Manila Teachers Partylist filed House Bill No. 7966 or the “Anti-ATM Pawning Scheme of 2020” penalizing pawning of ATMs card and possession of ATM cards or cash cards belonging to another.

Lacson said it is high time what we put a stop to this form of unfair business practice by imposing penalties against those who engage in the same and protect the public from these unscrupulous practices.

Bangko Sentral has described ATM Sangla Scheme as a dangerous scheme, for it exposes borrowers to identity theft and unauthorized use of personal data possibly for unlawful activities.