Complaint Against a Lending Company that Imposes “Fake Tax Fees”
A Philippine legal primer
1. What the scheme looks like
Borrowers are told that before a loan can be released they must first pay a “tax,” “BIR processing charge,” “clearance fee,” or similar amount that is not actually required by any Philippine tax law. The payment is demanded up-front (often through e-wallets or personal bank accounts); once it is made, the lender either (a) disappears, or (b) keeps requiring new “tax” payments until the borrower stops sending money. In short, the fee is a sham used to obtain money by deceit. citeturn2view0
2. Statutory and regulatory framework
| Area | Key law / rule | Why it matters to fake-tax schemes |
|---|---|---|
| Licensing of lenders | Republic Act 9474 (Lending Company Regulation Act) & its 2022 Revised IRR | All lending companies must have an SEC Certificate of Authority (CA) and may impose only reasonable charges that comply with the Truth in Lending Act. Operating without a CA, or collecting undisclosed charges, is an administrative and criminal offense. citeturn1search4 |
| Disclosure of charges | Republic Act 3765 (Truth in Lending Act) | Lenders must give a written Disclosure Statement that itemises every finance charge before the borrower signs. Undisclosed “tax” add-ons violate this Act. citeturn12search0 |
| Price ceilings | SEC Memorandum Circular 3-2022 implementing BSP Circular 1133-2021 | Caps all fees (not just interest) for loans ≤ ₱10,000 at an effective 15 % per month—leaving no room for random “tax” surcharges. citeturn8view0 |
| Consumer protection | Republic Act 11765 (Financial Products and Services Consumer Protection Act) | Empowers the SEC, BSP, IC and CDA to punish “unfair, deceptive, abusive or fraudulent” acts by financial service providers and grant restitution to borrowers. citeturn9search0 |
| General consumer law | Republic Act 7394 (Consumer Act) | Declares deceptive and unconscionable sales practices unlawful—applicable even to non-licensed operators. citeturn16search0 |
| Criminal fraud | Article 315, RPC (Estafa) | Collecting money through false pretences (e.g., a non-existent tax) is estafa, punishable by imprisonment and fine. citeturn15search3 |
| Cyber dimension | RA 10175 (Cybercrime) & RA 10173 (Data Privacy) | Online or in-app collection of fake fees can add cyber-estafa; misuse of borrowers’ personal data adds Data-Privacy liability. citeturn13search0 |
| Real tax context | Documentary Stamp Tax (DST) under the Tax Code | The only tax normally payable on a loan agreement is DST, which is remitted by the lender to the BIR (₱1.50 per ₱200 of principal). It is never collected in cash from the borrower at the point of application. citeturn10search3 |
3. Why the fee is illegal
- Misrepresentation – Passing a private charge off as a government tax is deceit, attracting estafa and cyber-estafa.
- Unfair or abusive conduct – RA 11765 allows regulators to halt, fine, and even shutter entities that impose charges which “cause or are likely to cause injury to a financial consumer.”
- Violation of disclosure & pricing rules – RA 3765 and SEC MC 3-2022 require full cost disclosure and cap total cost; a surprise “tax” breaches both.
- Operating without authority – Most fake-tax schemes come from unregistered apps or pseudo-lenders, a direct breach of RA 9474.
Regulators have acted on these grounds; e.g., in January 2024 the SEC revoked the licence of Wealth and Personal Development Lending Inc. and imposed ₱2 million in fines for illegal fee practices and non-compliance. citeturn11view0
4. Where—and how—to file a complaint
| Agency | When to go there | How to file | Possible outcomes |
|---|---|---|---|
| Securities and Exchange Commission (Financing & Lending Division) | Lender or app is a lending or financing company (or claims to be one) | Since 4 Nov 2024, complaints are lodged online via the SEC iMessage portal. Attach the filled-out complaint form, valid ID, proof of payment of the fake fee, chats, receipts, etc. citeturn6view0 | Formal Charge, fines up to ₱1 million per offence, suspension or revocation of CA, referral for criminal prosecution. |
| Bangko Sentral ng Pilipinas | Entity is a bank, EMI, pawnshop, or BNPL provider | E-mail [email protected] or use the BSP Online Buddy (BOB) portal. | Administrative sanctions; restitution; referral to AMLC. |
| Bureau of Internal Revenue | The scheme uses the BIR name/logo or issues fake “BIR official receipts.” | File a sworn complaint at the Revenue District Office or through the BIR Contact Center. | Criminal action for forgery and estafa; public advisory against the scam. |
| National Privacy Commission | App accessed contacts or ID photos without consent, or shamed the borrower | Complaint via privacy.gov.ph within 6 months of discovery | Fines up to ₱5 million; cease-and-desist order. |
| Law-enforcement (NBI-Cybercrime or PNP-ACG) | You want the culprits arrested and devices seized | Execute a sworn statement and give digital evidence | Inquest for estafa / cyber-estafa, arrest warrants, asset freeze. |
Tip: If the entity is unlicensed, e-mail the SEC Enforcement and Investor Protection Department directly at [email protected]. citeturn6view0
5. Building a strong case
- Preserve everything – screenshots of in-app “tax” prompts, payment receipts, call logs, and the loan advertisement.
- Get a notarised Affidavit of Complaint narrating the events, attaching the evidence chronologically.
- Compute the loss – list each “tax” payment, date, and mode of transfer; this figure becomes the amount claimed for restitution and damages.
- Check the lender’s status – use checkwithsec.sec.gov.ph or the SEC list of online lending platforms before filing.
- File swiftly – estafa complaints must be filed within the 10-year prescriptive period (15 if syndicated), but earlier filing speeds up asset tracing.
6. Remedies and penalties at a glance
| Violation | Body that hears the case | Penalty range |
|---|---|---|
| Charging undisclosed or fictitious fees | SEC (administrative) | Fine ₱25 000 – ₱1 million per act; suspension/revocation of CA; disgorgement of unlawful fees. citeturn8view0 |
| Estafa / Cyber-estafa | Regional Trial Court (criminal) | Prisión correccional to prisión mayor (max 20 yrs) + full restitution. citeturn15search3 |
| Data-privacy misuse | NPC | Fine up to ₱5 million and/or imprisonment up to 6 yrs. citeturn13search0 |
| Misuse of BIR name / forged receipts | RTC (criminal) under RPC Art. 171 (falsification) & NIRC | Imprisonment up to 6 yrs + fine; closure of business. |
| Operation without SEC licence | RTC & SEC | Fine ₱10 000 – ₱50 000 and/or 6 mos–10 yrs’ imprisonment under RA 9474. citeturn1search4 |
7. Practical tips for borrowers
- Verify first. Every legitimate lending company appears in the SEC public list and must display its Certificate of Authority and a standard Disclosure Statement.
- Red-flag checklist: demands for advance “tax,” personal e-wallet transfers, pressure to pay within minutes, no written disclosure, no DST explanation.
- Never send personal IDs via chat apps to unverified lenders—this data is often leaked to harass contacts.
- Report quickly. Regulators can freeze apps and domain names once a critical mass of complaints is reached.
8. Conclusion
A “tax fee” collected by a private lender is almost always a pure fabrication. Philippine law already supplies both substantive prohibitions (RA 11765, RA 9474, RA 7394, RPC Art. 315) and procedural channels (SEC iMessage, BSP-BOB, NPC, NBI-Cybercrime) to extinguish these schemes and return money to victims. Borrowers who act promptly—by preserving evidence, invoking disclosure rights, and filing coordinated complaints—can obtain restitution and help regulators shut down abusive lenders for good.
(This article is for general information and is not a substitute for case-specific legal advice.)