REPUBLIC ACT NO. 8484
(The Access Device Regulation)
An act regulating the issuance and use of access devices, prohibiting fraudulent acts committed relative thereto, providing penalties and for other purposes.
The recent advances in modern technology have led to the extensive use of certain devices in commercial transactions, prompting the State to regulate the same. hence, on February 3, 1998, Congress enacted Republic Act Number 8484, otherwise known as The Access Devices Regulation Act of 1998.
Termed as “access devices” by RA No. 8484, any card, plate, code, account number, electronic serial number, personal identification number, or other telecommunication service, equipment, or instrumental identifier, or other means of account access t hat can be used to obtain money, good, services or any other thing of value or to initiate transfer of funds (other than transfer originated solely by paper instrument) is now subject to regulation. The issuance and use of access devices are ought to regulate in order to protect the rights and define the liabilities of parties in commercial transactions involving them.
Essentially, the law imposes duties both to the access device issuer and holder, and penalize certain acts deemed unlawful for being detrimental to either the issuer or holder, or both.
The law mandates an access device issuer, or “card issuer,” to disclose either in writing or orally in any application or solicitation to open a credit card account the following: 1) annual percentage rate; 2) annual and other fees; 3) and balance calculation method; 4) cash advance fee; and 5)) over the limit fee.
Moreover, the computation used in order to arrive at such charges and fees required, to the extent practicable, to be explained in detail and a clear illustration of the manner by which it is made to apply is also necessary.
Nonetheless, there are certain exceptions for the above requirement of disclosure not to apply. This is when application or solicitation is made through telephone, provided that the issuer does not impose any annual fee, and fee in connection with telephone solicitation unless the customer signifies acceptance by using the card, and that a clear disclosure of the information enumerated in the preceding paragraph is made in writing within thirty (30) after the consumer requests for the card, but in no event later than the date of the delivery of the card, and that the consumer is not obligated to accept the card or account and the consumer will not be obligated to pay any fees or charges disclosed unless the consumer accepts the card or account by using the card.
Failure on the part of the issuer to fulfill the above requirements will result in the suspension or cancellation of its authority to issue credit cards, after due notice and hearing, by the Banko Sentral ng Pilipinas, the Securities and Exchange Commission and such other government agencies.
In sum therefore, the above omission is made punishable if the following elements occur. One, there is an application or solicitation. Second, such application or solicitation should include the information required by law. and third, failure on the part of the issuer to disclose such information.
In one case (Ermitano v. GR No. 127246, April 21, 1999), the Supreme Court had the occasion to rule on the validity of contracts involving credit cards. The credit cards holder contended that the credit card company should be blamed for the charges the same being unwarranted by the contract. As stipulated, once a lost card has been reported, purchases made thereafter should not accrue on the part of the holder.
The Court said notwithstanding the fact that the contract of the parties is a contract of adhesion the same is valid. However, if the same should include terms difficult to interpret as to hide the true intent to the detriment of the holder, holding it void requires no hesitation. Thus, contracts which provide for ambiguous terms of payment, imposition of charges and fees may be held void invoking the principle of the contract of adhesion.
Clearly, in this case decided in 1999, the Court was concerned about an access device issuer’s vulnerability to abuse the provisions of the contract. It is quite surprising, however, that the Court did not make reference to RA No. 8484 to think that it was already in effect when the resolution was promulgated.
Nonetheless, in American Express International Co., Inc. vs. IAC (GR NO. 70766, November 9, 1988) Supreme Court turned down the argument of private respondent grounded on the adhesion principle saying indeed, in a contract of adhesion the maker of the contract has all the advantages, however, the one to whom it is offered has the absolute prerogative to accept or deny the same.
On the other hand, an access device holder may be penalized when he or she fraudulently applied for such device. An access device fraudulently applied for means any access device that was applied for or issued on account of the use of falsified document, false information, fictitious identities and addresses, or any form of false pretense or misrepresentation. Thus, the use, trafficking in, possession, and inducing, enticing or in any manner allowing one to use access device fraudulently applied for are considered unlawful.
The element of fraud is indispensable for this provision of RA 8484 to apply. It is a condition sine qua non before one may be charged with the defined offense.
Thus, the law provides for presumptions of Intent to defraud on the basis of mere possession, control or custody of: a) an access device without lawful authority; b) a counterfeit access device; any device making or altering equipment; c) an access device or medium on which an access device is written not in the ordinary course of the possessor’s business; or d) any genuine access device, not in the name of the possessor.
A card holder who abandons or surreptitiously leaves the place of employment, business or residence stated in his application for 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.
At first glance, the above presumptions, when applied in real cases, may suffer from constitutional infirmities. The constitution provides that a person shall not be held to answer to a criminal offense without due process of law. it may be argued that such presumptions are rebuttable ones. However, the danger lies in the shifting of the burden of proof from the prosecution to the defense.
The law provides for sixteen (16) prohibited acts which refer to the production, use, possession of or trafficking in unauthorized or counterfeit access devices. It also includes acts deemed fraudulent that increase the amount involved in commercial transactions using access devices. Obtaining money or anything of value through the use of an access device with intent to defraud or gain, and fleeing thereafter.
In the final analysis, the law basically seeks to address the issue of fraud in the issuance and use of access devices, especially credit cards. Fraud may be committed by the issuer by making false or vague information in the application or solicitation to open credit card accounts. The applicant or holder, on the other hand, fraudulently misrepresents himself by giving wrong identity, false profession or employment, or bloated income.
Take the case for instance of Citibank v. Gatchalian (GR No. 111222, January 18, 1995) which shows how credit card applicants through false representation were able to amass in simple terms P790,000.00 from petitioner.
In this case, two employees of the Asian-Pacific Broadcasting Co,. Inc. (ABCI) applied for nineteen (19( credit cards with Citibank using different names other than their real names. The Citibank approved the applications and the credit cards were delivered to them for use. However, this case involves an illegal dismissal case where a Citibank employee was found guilty of gross negligence for effecting the delivery of the credit cards. Her dismissal was affirmed in this case.
Insofar as access device issuers are concerned, Eermitano v. C.A., may be a case in point. The credit card holder lost his credit card which he immediately reported to the card issuer. The contract stipulated that in case of lost, the same should be reported immediately, otherwise purchases made shall be charged to the holder. In this case, despite the prompt reporting of the holder, the issuer still charged the purchases against the former. The Court in this case held the issuer in breach of the contract.
The penalties provided for by RA 8484 are imprisonment and fine. Imprisonment is from six (6) years to ten (10) years and fine ranges from ten thousand pesos (10,000.00) or twice the value of the offense, whichever is higher.
The penalties are increased in case the offender has a similar previous conviction, meaning if he was previously found violating RA 8484. In which case, the accused shall suffer imprisonment of not less than twelve (12) years and not more than twenty (20) years.
The two other stages of felony, as defined by the Revised Penal Code is also made punishable. Thus, attempted and frustrated are meted out with the penalties of imprisonment and fine albeit only in fractions of the above penalties.
R.A. 8484 may seem to favor the issuer. A credit card company may only be meted out the penalty of cancellation or suspension, which may be considered as mere administrative sanctions. In fact, it is not the courts which impose such sanctions but administrative agencies such as the Bangko Sentral and the Securities and Exchange Commission.
On the other hand, a holder or mere possessor of a counterfeit fraudulently applied for access device may be convicted and be made to suffer imprisonment and fine.
JURISPRUDENCE:
Citibank v Gatchalian, (G.R. No. 111222, January 18, 1995)
It shows how credit card applicants through false representation were able to amass in simple terms P790,000.00 from petitioner.
In this case, two employees of the Asian-Pacific Broadcasting Co., Inc. (ABCI) applied for nineteen (19) credit cards with Citibank using different names other than their real names. The Citbank approved the applications and the credit cards were delivered to them for use. However, this case involves an illegal dismissal case where a Citibank employee was found guilty of gross negligence for effecting the delivery of the credit cards. Her dismissal was affirmed in this case.
Insofar as access device issuers are concerned, Eermitano v. CA, may be a case in point. The credit card holder lost his credit card which he immediately reported to the card issuer. The contract stipulated that in case of lost, the same should be reported immediately, otherwise purchaser made shall be charged to the holder. In this case, despite the prompt reporting of the holder, the issuer still charged the purchases against the former. The Court in this case held that issuer in breach of the contract.
