Complaint Process Against Loan Companies in the Philippines
A comprehensive legal-practice guide
1. The Legal and Regulatory Framework
| Class of lender | Principal law | Primary regulator | Key consumer-protection issuances |
|---|---|---|---|
| Banks, thrift banks, rural/co-op banks, credit card issuers, electronic money issuers, and “quasi-banks” | Republic Act (RA) 7653 (New Central Bank Act, as amended by RA 11211); RA 11765 (Financial Products and Services Consumer Protection Act, FPSCPA, 2022) | Bangko Sentral ng Pilipinas (BSP) | BSP Circular 1160 (2023) – Implementing Rules of the FPSCPA; BSP Circular 1048 (2019) – Financial Consumer Protection Regulations; BSP Manual of Regulations for Banks / NBFIs |
| Financing companies (installment plans, in-house auto financing, etc.) | RA 5980 (Financing Company Act, as amended by RA 8556) | Securities and Exchange Commission (SEC) | SEC Memorandum Circular (MC) 5-2015 – Revised FC Rules |
| Lending companies (salary-loan firms, payday lenders, “loan apps”) | RA 9474 (Lending Company Regulation Act of 2007) | SEC | SEC MC 18-2019 – Prohibited Unfair Collection Practices; SEC MC 19-2021 – Registration of Online Lending Platforms |
| Co-operative credit unions | RA 9520 (Co-op Code) | Cooperative Development Authority (CDA) | CDA circulars on co-op lending |
| Pawnshops & money service businesses | BSP-licensed NBFIs | BSP | BSP Circulars 938 (2017) etc. |
Cross-cutting statutes that empower borrowers:
- RA 7394 – Consumer Act of the Philippines (Chapter IV on Consumer Credit)
- RA 10173 – Data Privacy Act (DPA)
- RA 1405 – Bank Secrecy Law (limited borrower benefit)
- Civil Code, Revised Penal Code (harassment, unjust vexation, grave threats)
- RA 9484 – Anti-Violence vs. Women & Children (if collection amounts to violence)
2. Borrower’s Hierarchy of Remedies
Philippine regulators generally require an exhaust-and-escalate approach:
- Internal dispute resolution (IDR) – Write the lender’s customer assistance or “Consumer Assistance Desk” first.
- Regulatory complaint – If unresolved or past 15 banking days (BSP) / 10 calendar days (SEC) without action, lodge a formal complaint.
- Administrative appeal / mediation – The regulator may call conferences or mediation.
- Civil suit or small-claims – For monetary recovery or damages.
- Criminal action – For usury‐like schemes, harassment, data-privacy crimes, estafa.
- Alternative fora – Barangay conciliation, accredited ADR centers, Consumer Arbitration at DTI (for credit tied to sale of goods).
3. Internal Dispute Resolution (Step 1)
All licensed lenders must maintain an IDR system under §6, RA 11765 and corresponding BSP/SEC circulars.
How to start
Send a written complaint (physical letter or email) stating:
- full name, contact info, loan account number;
- facts, dates, amounts;
- relief sought (e.g., stop harassment, correct ledger, refund over-collection).
Attach proof: statement of account, SMS screenshots, payment receipts.
Timelines
- BSP-supervised FIs: acknowledge within two (2) banking days, resolve within 15 banking days (extendable to 45 for complex cases).
- SEC-registered lending/financing companies: acknowledge within five (5) days, resolve within 10 calendar days per MC 18-2019.
Keep proof of dispatch; you will need it when escalating.
4. Regulator-Specific Complaint Processes
4.1 Bangko Sentral ng Pilipinas (BSP)
| Item | Details |
|---|---|
| Who may complain | Borrowers of any BSP-supervised financial institution (BSFI) – banks, EMI wallets, credit-card issuers, pawnshops, financing companies that opted for BSP supervision, even offshore banks marketing in PH. |
| Governing unit | Financial Consumer Protection Department (FCPD) |
| Modes of filing | • Online form at https://www.bsp.gov.ph → Submit Complaint • Email: consumeraffairs@bsp.gov.ph • Postal: BSP Complex, Roxas Blvd., Manila • Walk-in (Consumer Desk, ground floor) |
| Minimum contents | Identifying data, Institution’s name & branch, narration of events, evidence. Use BSP Complaint Form (Annex A of Circular 1160). |
| Flow | 1⃣ BSP issues Case Reference No. and forwards a 15-day comment request to the BSFI. 2⃣ BSFI replies to BSP + consumer. 3⃣ BSP evaluates, may call a mediated conference. 4⃣ BSP issues a resolution letter (non-binding but carries supervisory weight). |
| Possible outcomes | Refunds/credits, correction of records, cessation of abusive calls, imposition of BSP administrative sanctions (up to ₱200k per violation + daily fines, suspension of officers). |
| Appeal | BSP action is technically reviewable by the Monetary Board and, in exceptional cases, by certiorari to the Court of Appeals under Rule 65. |
4.2 Securities and Exchange Commission (SEC)
SEC handles all lending companies (LCs) and financing companies (FCs) not supervised by BSP.
Division: Corporate Governance and Finance Department – Financing & Lending Division (CGFD-FLCD)
Grounds: Over-charging, threats, public shaming, “contact scraping,” misrepresentation, operating without a license, violating SEC MC 18-2019.
Verified complaint: Must be under oath and include:
- names/addresses of parties;
- acts complained of;
- statutes/circulars violated;
- supporting affidavits/screenshots/recordings.
Venue & Mode:
- File at SEC main office (Pasay), any Extension Office (Cebu, Davao, Iloilo), or by email to flcd@sec.gov.ph (scanned, notarised).
Procedure:
- Show-Cause Order to the company → 3–5 days to answer.
- Clarificatory conference (optional).
- Order or Decision: fines (₱10k–₱1 M per count), suspension/revocation of CA, cease-and-desist, referral for criminal prosecution (penalties under RA 9474: ₱10k–₱50k + 6 months–10 years imprisonment).
Online Lending Apps (OLAs). Under MC 19-2021, platforms must be separately registered. Complaints can lead to Google-Play takedown requests and NBI referrals.
4.3 National Privacy Commission (NPC)
Collections that scrape contacts or broadcast a borrower’s debt violate §§12, 18 and 20, Data Privacy Act + NPC Advisory 2021-01.
- Filing: email complaints@privacy.gov.ph or use NPC GAMO portal.
- Process: Mediation within 15 days; if unresolved, NPC opens a Formal Investigation and may issue a Cease & Desist Order or recommend criminal prosecution (penalty: ₱500k–₱5 M and 1–6 years imprisonment).
4.4 Department of Trade and Industry (DTI)
DTI’s Consumer Policy and Advocacy Bureau hears consumer-credit complaints where the loan is incidental to the sale of goods (e.g., furniture store deferred-payment plan).
- File via e-ConsumerCare portal or walk-in at DTI Provincial Offices.
- Mediation → Arbitration Decision (appealable to Consumer Arbitration Commission).
4.5 Barangay Conciliation & ADR
Under RA 9285 (ADR Act) and KP Law (RA 7160, ch. VII), money claims ≤ ₱400,000 between residents of the same city/municipality require Lupong Tagapamayapa mediation before court filing—except where the dispute is already under an administrative agency’s jurisdiction or involves corporations (BPI Family Bank vs. Sps. Velazquez, G.R. 188577, 2012).
Certified settlers (PDRC, PAMC) may also administer mediation; parties can agree to arbitration.
5. Civil-Court Options
| Track | Amount | Key Rules | Advantages |
|---|---|---|---|
| Small Claims Court | ≤ ₱1 million (A.M. 08-8-7-SC, as amended 2022) | Statement of Claim (Form 1-SCC); no lawyer; single hearing within 30 days; decision immediately final. | Speed, low cost |
| Ordinary civil action | > ₱1 M or involves damages/injunctions | Rules of Court 2019, Regional/Metropolitan/MTCC jurisdiction | Can claim moral + exemplary damages, attorney’s fees |
| Class suit / derivative suit | Multiple borrowers similarly situated | Rule 3 §12 | Economies of scale |
Prescriptive periods:
- Written loan contracts – 10 years (Art. 1144, Civil Code).
- Quasi-delicts (harassment) – 4 years.
- Violations under RA 9474 – 5 years from discovery.
6. Criminal Remedies
| Offense | Statute | Penalty |
|---|---|---|
| Operating a lending company without SEC license | RA 9474 §12 | ₱50k–₱1 M + 6 mos–10 yrs |
| Public shaming, unwanted calls with threats | Art. 287, 282 & 287 Revised Penal Code | Arresto menor to prisión correccional |
| Extortion or coercion | Art. 294, 286 RPC | 4 yrs 2 mos–20 yrs |
| Unauthorized processing/ leakage of personal data | RA 10173 §25-29 | ₱500k–₱5 M + 1–6 yrs |
| Cyber-crime aided threats | RA 10175 §6 | one degree higher than base RPC offense |
Criminal complaints are filed with the Office of the City/Provincial Prosecutor or electronically via e-Complaint (NPS). For cyber-harassment, endorse to PNP-ACG or NBI-CCD.
7. Evidence & Documentation Checklist
- Demand letter & proof of receipt
- Loan contract, disclosure statement (RA 3765)
- Promissory notes, receipts, ledger print-out
- SMS/Chat/Email/Call recordings (under RA 4200, record only if you are a party)
- Screenshots of social-media shaming posts
- Government-ID with signature (for verification)
- Notarised affidavits of witnesses
- Proof of economic loss or emotional distress (medical certificate, payslips)
8. Practical Timeline (Illustrative)
| Day | Action |
|---|---|
| 0 | Borrower sends written complaint to lender (keep registry-mail stub). |
| +5–15 | Lender responds / fails to respond. |
| +16 | Borrower files with BSP/SEC/NPC. |
| +30 | Regulator forwards complaint → company answers. |
| +60 | Mediation or clarificatory conference. |
| +90 | Regulator issues resolution / order. |
| +91+ | If unresolved: file Small-Claims or civil suit; or initiate criminal complaint. |
9. Penalties and Remedies Available to Borrowers
- Restitution / Refund of over-collected interest, penalties, or illegal charges.
- Restructuring or waiver of fees.
- Damages: Actual, moral, exemplary (Art. 2224 & 2232 Civil Code).
- Injunctive relief to stop harassment (Rule 58).
- Administrative fines & license suspension against the lender (public deterrence).
10. Draft Complaint-Letter Template (Internal Stage)
Subject: Formal Consumer Complaint – Loan Account No. XXXX
Date: ___ To: Consumer Assistance Officer, ABC Lending Corp.
Dear Sir/Madam:
- I obtained a salary loan on 15 January 2025 amounting to ₱30,000 with a disclosed interest of 10 %/month.
- Despite timely payments, your collectors have…
- These acts violate SEC MC 18-2019, RA 7394, and the Data Privacy Act.
Relief requested:
- cessation of harassment calls;
- correction of ledger to reflect total payments of ₱___;
- refund of over-collections amounting to ₱____.
Please respond within 10 days in writing.
Respectfully, [Signature]
11. Tips for Borrowers & Practitioners
- Document everything – screenshots lose metadata; export chat logs.
- Maintain civility – vulgar replies can weaken harassment claims.
- Check the license – verify lender’s Certificate of Authority on the SEC website or BSP list of BSFIs.
- Mind the prescriptive period – don’t wait until the 4- or 10-year clock is nearly done.
- Consider a payment‐restructuring request before filing; regulators view good-faith efforts favorably.
- Use the barangay route strategically – a failed conciliation toll-stops prescription and provides a Certificate to File Action.
- For OFWs – you can file through a representative via SPA; BSP/SEC accept electronic signatures.
- Security of tenure – employers cannot dismiss employees solely for wage garnishment; cite Art. 299 Labor Code.
12. Conclusion
The Philippines has evolved a multi-layered, borrower-centric complaint architecture. Start with the lender’s own help desk, then elevate to the regulator with clear evidence and within the statutory timelines. Regulators now wield stronger powers under the Financial Products and Services Consumer Protection Act of 2022, and courts (particularly the streamlined Small Claims procedure) offer quick redress for modest sums. Finally, criminal statutes—especially the Data Privacy Act—provide teeth against abusive collection methods. A disciplined paper trail and knowledge of the correct forum remain the borrower’s best allies.