The question that is frequently asked, as far as credit cards are concerned, is whether one may be imprisoned for failure to pay credit card debts.
This has often been posed by no less than the credit card holders, who, for some reasons, failed to pay their credit card debts.
In order to obtain the desired answer, there is an imperative need to examine the applicable law on credit cards.
And, for similar purpose, it is equally important to take a closer look at the pertinent provisions in our Constitution, particularly those found under the “Bill of Rights.”
Here in the Philippines, the law governing credit cards is Republic Act No. 8484 (RA 8484), otherwise known as the “Access Devices Regulation Act of 1998.”
Approved by the Tenth Congress of the Philippines on February 11, 1998, RA 8484 is an act crafted to, among others, regulate the issuance and use of access devices and prohibit fraudulent acts committed in relation to such devices.
Definition of an “Access Device” under RA 8484
An “Access Device” is “any card, plate, code, account number, electronic serial number, personal identification number, or other telecommunications service, equipment, or instrumental identifier, or other means of account access that can be used to obtain money, good, services, or any other thing of value or to initiate a transfer of funds (other than a transfer originated solely by paper instrument).”
Definition of a “Credit Card” under RA 8484
While a “Credit Card,” which is included within the meaning of an access device, is “any card, plate, coupon book, or other credit device existing for the purpose of obtaining money, goods, property, labor or services or any thing of value on credit.”
Mere failure to pay credit card debts
A careful reading of RA 8484 in its entirety will show that “mere failure to pay credit card debts” is not among the “Prohibited Acts,” constituting “Access Device Fraud,” which are declared to be unlawful and, thus, punishable with a fine and imprisonment.
What is punishable is the act of “obtaining money or anything of value through the use of an access device, with intent to defraud or with intent to gain and fleeing thereafter.”
Intent to Defraud
As far as the element of “Intent to Defraud” is concerned, RA 8484 provides for a prima facie presumption to the effect that “a cardholder who abandons or surreptitiously leaves the place of employment, business or residence stated in his application or credit card, without informing the credit card company of the place where he could actually be found, if at the time of such abandonment or surreptitious leaving, the outstanding and unpaid balance is past due for at least ninety (90) days and is more than Ten thousand pesos (P10,000.00), shall be prima facie presumed to have used his credit card with intent to defraud.”
Section 20 of Article III of the 1987 Constitution
What is clear is that “mere failure to pay credit card debts,” in the absence of fraud, will never give rise to any criminal liability on the part of any credit card holder.
But even assuming that “mere failure to pay credit card debts” is among the prohibited acts constituting access device fraud, which, as discussed, are declared to be unlawful and, thus, punishable with a fine and imprisonment, still, it will be struck down as void and, as such, of no effect for being unconstitutional, it being in direct contravention of the constitutional prohibition against imprisonment for debts.
Under Section 20 of Article III (Bill of Rights) of the 1987 Constitution, it is explicitly provided that “no person shall be imprisoned for debts,” and, this, no doubt, includes, within its scope, credit card debts.