BY RAPPLER.COM
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OVERCHARGED. Government Service Insurance System members line up to apply for loans . File photo by Dennis Sabangan/EPA
MANILA, Philippines – If you’re a member of the Government Service Insurance System (GSIS) and you paid your loans dutifully, you’re good, right?
Well, no. In 2012, the GSIS charged you extra when it wasn’t your fault that its Consolidated Salary Loan Plus Program had loopholes, and its system caused delays in posting or crediting your loan payments.
For this lapse, the GSIS was ordered by the Commission on Audit (COA) to reimburse members some P1.3 billion worth of loan interests that it overcharged them last year.
COA said loopholes in the GSIS and other procedures resulted in members being overcharged “capitalized interest” totaling P859.835 million.
Meanwhile, delays in the posting or crediting of loan payments caused “excess interest” amounting to P441.122 million.
There were conflicting provisions in Policy and Procedural Guidelines No. 201-09 and PPG No. 217-12 that caused confusion, and which in turn, led to an extra month being added to the interest charges imposed on a borrower upon approval of the loan.
“The charging of the third month interest, which was capitalized, caused the GSIS overcharging its members/borrowers totaling P859.835 million for CY 2012,” COA said.
Paragraph 9, Section III, of PPG No. 201-09 also caused a mix-up. It states that an interest rate of 12% shall be charged based on diminishing balance. This was used to make members pay an extra month of interest upon renewal of their loans.
No reimbursement, just advance payment
The provision that “a fraction of a month is considered as one month” and should be charged with interest accordingly was mistakenly applied to those completing their payments for old loans and taking out new loans in the same month.
“Thus, on the month of renewal of loan, the member is charged twice the whole month interest – on old loan and renewal,” COA pointed out.
“Computation of capitalized interest on loans of all members starting from the date of loan approval on a pro-rata basis or actual days of loan occurrence disclosed a total excess interest of P441.122 million charged on loans of members for CY 2012,” auditors said.
Problems in the processing of loan payments in the GSIS system also meant amortizations were not promptly credited to the borrower’s account.
As a consequence, the same members were allowed to take lower amounts of new loans because their accounts showed arrearages or missed payments.
And yet once the delayed remittance is finally posted, their account would show a credit balance or overpayment.
GSIS has acknowledged these problems, and has informed COA that a scheme is in place to refund its members.
The borrowers, however, will not be given back what they overpaid. This will just be credited as “advance payment” to any existing loans, GSIS said.
In cases where members have fully paid their loans, they will receive the due amount as reimbursement.
– Rappler.com
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