BSP Issues Warning Against Sangla-ATM Schemes—But What Are They?

It has been revealed that senior citizens, in particular, have fallen victim to these “sangla-ATM” loan schemes—sometimes without their knowledge. We list tips on how to avoid it.

The Bangko Sentral ng Pilipinas (BSP) has warned the country’s 58 million automated teller machine (ATM) cardholders not to participate in what it calls “sangla-ATM” schemes. According to a report by the Inquirer, these schemes “demand ATM cards and personal identification numbers (PINs) as collateral for loans.”

Simply put, this scheme preys on a person’s urgency for cash. After all, when caught in a tight situation, people can be forced to make unwise decisions, which include taking out a loan with exorbitant interest rates, or in worse-case scenarios, giving up their ATM card as collateral.

“This scheme may lead to financial troubles for cardholders as it may be difficult for them to monitor withdrawals made by people to whom the ATM card and PIN were given,” the BSP says in its advisory.

“Creditors may also withdraw amounts higher than the cardholders’ debt,” it adds. 

Senator Tulfo Voices Concerns for Senior Citizens 

According to a report by SunStar Cebu, Senator Raffy Tulfo has expressed that he is against “sangla-ATM” schemes. He further added that there should be a regulation “in the use of Social Security System (SSS) and Government Service Insurance System (GSIS) pension ATM cards as collateral due to the abuse that the elderly has taken from relatives because of this.” 

“Our elderly pensioners are being taken advantage of,” Senator Tulfo said during a Senate plenary session. “Their scheming children, relatives or caregivers take their pension ATMs and take on a loan on their behalf—sometimes [even] forging their signatures.” 

“These pensioners are unaware that loans have been taken under their name, or sometimes, they are coerced to agreeing to their able-bodied caregiver or relatives,” he pointed out.

Why ‘Sangla-ATM’ Schemes are Appealing 

Despite the risks that come with “sangla-ATM” schemes, SunStar Cebu’s report notes that this particular scheme is actually the most popular collateral for consumer loans, according to the 2018 Consumer Finance Survey of the BSP.

Those who have participated in “sangla-ATM” schemes have pointed out that the easy application process and fast approval made it enticing to them. There is also the option to choose the loan amount, as well as the number of months that it can be paid back. This, of course, depends on the person’s capacity to repay the loan.

These factors have made participating in “sangla-ATM” a necessity, according to SunStar Cebu, especially during emergencies and fulfilling financial obligations. However, everyone should always remain cautious when it comes to loans, whether formal or informal and make the effort to research and study the pros and cons before participating in any loan scheme.

How to Avoid Getting Scammed

While those who feel pressed for time and money feel they have no other option outside of “sangla-ATM,” it is still crucial for anyone participating in this scheme to be extra careful when making a transaction. According to ABS-CBN News, this scheme requires that you give your Personal Identification Number (PIN), which gives the creditor access to all the money inside.

Make it a point to download your bank’s mobile app, if applicable, so that you are able to monitor any and all transactions being made with your account. Once the ATM is recovered, change the PIN as soon as possible to avoid chances of being scammed.

ABS-CBN News likewise points out that creditors of “sangla-ATM” are pretty much black market creditors. Given this, you can be charged with exorbitant interest rates and, should things go wrong, the government will not be able to help you recover what you have lost. If possible, make sure that your agreement with your creditor is in writing and signed by both you and the creditor. That way, you will always have documented proof what has been agreed upon.