Complaints Against Unfair Online Loan Apps in the Philippines

A practical legal guide for borrowers

Quick note: This is general information, not legal advice. If you’re facing harassment or urgent threats, seek help from a lawyer or your local authorities right away.

1) What “unfair” looks like in online lending

Common abusive practices

“Debt-shaming”: texting your contacts, posting about you on social media, group chats, or messaging your employer.
Harassment: threats, profanities, repeated calls, or pretending to be police/lawyers/court staff.
Hidden or excessive charges: large “processing” or “service” fees, daily penalties, or automatic rollovers.
Misleading ads: “0% interest” but with hefty fees that make the cost sky-high.
Invasive data grabs: forcing access to your contacts/photos, or using your data for collection and shaming.
Unauthorised debits: taking money from your e-wallet/bank without a clear, revocable mandate.

These behaviors can violate multiple Philippine laws and regulations (more below), even if you clicked “Agree” in the app. Contracts cannot legalize acts that are contrary to law, morals, good customs, public order, or public policy.

2) The legal framework (Philippine context)

Primary regulators

SEC (Securities and Exchange Commission) – supervises lending and financing companies and their online lending platforms (OLPs). It can suspend apps, revoke licenses, and penalize unfair collection practices.
BSP (Bangko Sentral ng Pilipinas) – supervises banks, e-money issuers, and other BSP-supervised financial institutions (BSFIs). If your lender is a bank or EMI, you escalate to the BSP.
NPC (National Privacy Commission) – enforces the Data Privacy Act; tackles contact-harvesting, doxxing, and debt-shaming via personal data misuse.

Key statutes and rules commonly invoked

Lending Company Regulation Act (RA 9474) and Financing Company Act (RA 8556) – licensing/oversight of lending & financing companies by the SEC. Operating without SEC authority (or via an unregistered app) is unlawful.
Financial Consumer Protection Act (RA 11765) – a cross-sector law (SEC/BSP/IC/CDA) that protects financial consumers against abusive collection, misleading sales, lack of disclosure, and unfair treatment; empowers regulators to impose restitution, fines, and cease-and-desist orders.
Truth in Lending Act (RA 3765) and Consumer Act (RA 7394, Title IV on consumer credit) – require clear disclosure of the true cost of credit (finance charges, total effective cost).
Data Privacy Act (RA 10173) – prohibits unauthorized processing or disclosure of personal data (e.g., scraping and blasting your phonebook, posting your info). Offenses can carry fines and imprisonment.
Revised Penal Code & Cybercrime Prevention Act (RA 10175) – harassing collectors may commit grave threats, coercion, libel/cyber-libel, or unjust vexation, depending on the facts.
Civil Code (Arts. 19, 20, 21; 1306; 1229) – provides grounds to claim damages for abuse of rights, invalidate unconscionable terms, and reduce iniquitous interest/penalties. The Supreme Court has repeatedly struck down 3%–7% per month and similarly exorbitant rates as unconscionable.

Unfair debt-collection practices (illustrative)

Threats of violence, arrest, or shaming.
Pretending to be a government officer, lawyer, court sheriff, or similar.
Contacting your employer/family/friends or posting your debt publicly.
Calling at clearly unreasonable hours or repeatedly to harass.
Using your contact list or photos for intimidation or disclosure. (These are the kinds of behaviors the SEC has explicitly prohibited for lending/financing companies; similar standards apply under the FCPA and Data Privacy Act.)

3) Are interest and fees with online apps legal?

Interest ceilings are generally deregulated, but courts void or reduce rates that are unconscionable. Courts also pare down penalty charges under Civil Code Art. 1229.
“Processing/service fees” that shrink the cash you actually receive must be clearly disclosed; otherwise, they can be treated as finance charges that inflate the true cost and support a claim for deception.
Attorney’s fees/collection fees cannot be unilaterally imposed without a valid stipulation and are still subject to judicial scrutiny for reasonableness.

4) Can non-payment land you in jail?

No. Mere non-payment of a loan is civil, not criminal.
Criminal cases (e.g., estafa, B.P. 22 bouncing checks) require specific elements like deceit or a check; most app loans don’t involve checks. Empty threats of arrest or “police coming to your office” are classic harassment.

5) How to check legitimacy

Identify the entity behind the app (legal name on the app/contract/receipt).
If a bank/EMI → regulated by BSP.
If a lending/financing company → must be SEC-registered and hold the proper Certificate of Authority; OLPs should be registered with the SEC as well.
Apps run by unregistered entities or using unregistered platforms are a red flag.

(You can verify status through the official SEC and BSP channels. Keep screenshots of the results.)

6) Your options and where to complain

A) If the app/entity is a lending/financing company

File with the SEC. Request investigation for unfair collection, unregistered OLP, false disclosures, etc. What to attach: screenshots of chats/calls, the loan agreement, receipts/bank statements, app profile page, and a narrative of dates and acts.

B) If the lender is a bank/EMI/BSFI

File with the BSP (financial consumer assistance). Cite the FCPA and unfair treatment/collection, misdisclosures, or unauthorized debits.

C) If there’s data-privacy abuse (contact-harvesting, public shaming, doxxing)

File with the NPC under the Data Privacy Act (unauthorized processing/disclosure; processing for incompatible purposes; malicious disclosure). Ask for: cease-and-desist, deletion/erasure, and sanctions.

D) If there’s criminal harassment

Report to PNP-ACG or NBI-Cybercrime and your local police. Offenses may include grave threats, coercion, libel/cyber-libel, unjust vexation. Provide device screenshots, numbers, account handles, and call logs.

E) If you want money relief or contract fixes

Small Claims Court (no lawyers needed in hearings). Currently used for money claims up to ₱1,000,000 (thresholds can change).
Ask the court to:
- declare interest/penalties void or reduced as unconscionable;
- order a recomputation (principal + reasonable interest only);
- enjoin harassment via protective relief (in a separate civil action, if needed).
Barangay conciliation is usually not required when you sue a corporation (most lenders), but confirm if your case falls under the Katarungang Pambarangay rules.

7) Step-by-step: Building a strong complaint

Secure your device & data
- Revoke app permissions (contacts, camera, storage, location).
- Change passwords; enable device PIN/biometrics.
- Block numbers/IDs used by collectors.
Archive everything
- Screenshots of chats, call logs, caller IDs, group messages, social posts.
- Loan contract, disclosures, app screenshots, payment proofs.
- Note dates/times, and identify people who received shaming messages.
Demand they stop (optional but helpful)
- Send a short cease-and-desist citing Data Privacy Act, FCPA, and SEC rules on collection. Demand they stop contacting third parties, delete unlawfully obtained data, and limit communications to you by email/SMS during reasonable hours.
Choose venues (you can do several in parallel)
- SEC or BSP (depending on entity);
- NPC for privacy violations;
- Police/PNP-ACG/NBI for criminal acts;
- Small Claims for recomputation/refund;
- App store report to flag abusive apps (helps with evidence trail).
Mind your payments
- If you can pay principal/legitimate interest, consider paying to the official account only (never to a collector’s personal wallet) while you dispute unlawful fees/penalties. Keep receipts.

8) Templates you can adapt

A) Cease-and-Desist to Collector

Subject: Cease and Desist – Unfair Collection & Data Privacy Violations I am [Name], borrower under Loan ID [____] with [Company]. Your agents have (1) contacted my contacts/employer, (2) threatened/harassed me on [dates], and (3) used my personal data for debt-shaming. These acts violate the Data Privacy Act (RA 10173), the Financial Consumer Protection Act (RA 11765), and SEC rules on debt collection. I demand you cease all harassment, stop contacting third parties, and delete unlawfully obtained data. Limit communications to me at [email/number] during reasonable hours. Non-compliance will be reported to the SEC, NPC, and law enforcement. — [Name], [Address], [Contact]

B) SEC/BSP Complaint (summary)

Parties: Your full details; lender’s legal name and app name.
Facts: Timeline of loan, harassment, misdisclosures, data misuse.
Violations: FCPA; SEC collection prohibitions / licensing lapses; Truth in Lending/Consumer Act issues.
Relief: Investigation; cease-and-desist; license/app suspension; restitution/recomputation; directive to delete personal data; penalties.

C) NPC Complaint (privacy)

Data involved: your number, contacts, photos, workplace, social posts.
Acts: contact-harvesting, disclosure to third parties, group chats, social posts.
Basis: unauthorized processing/disclosure; processing for incompatible purpose; malicious disclosure.
Relief: cease processing; delete data; sanction; require data-protection measures; notification of affected third parties.

D) Police/NBI Report (criminal)

Offense theory: grave threats/coercion/libel/cyber-libel/unjust vexation.
Evidence: screenshots, caller IDs, links, timestamps, witnesses.

9) Evidence checklist (print this)

✅ Loan contract / in-app terms & screenshots
✅ Payment receipts / bank or e-wallet statements
✅ Chat logs, voice recordings (if any), call logs
✅ Screencaps of posts to group chats/social media
✅ Names/numbers of recipients who got shaming texts
✅ Copies of your cease-and-desist and proof of sending
✅ Device/app permission logs (what access you granted)
✅ Any customer-service tickets or emails

10) Practical do’s and don’ts

Keep communications in writing; ask for the company’s legal name and registered address.
Pay only via official channels and get receipts.
Tell your employer (if contacted) it’s a privacy violation; ask HR to preserve evidence.
Consider paying principal while disputing illegal fees to reduce exposure.

Don’t

Don’t send payments to a collector’s personal account.
Don’t share new IDs/photos “for verification” through chat.
Don’t engage in heated exchanges; let the evidence speak for you.
Don’t ignore court papers—if you ever receive real ones, attend.

11) For legitimate lenders and app operators (compliance snapshot)

Maintain SEC/BSP authorization and register each OLP with the proper disclosures.
Implement fair collection protocols and train agents; ban third-party contact and threats.
Provide clear, upfront APR/total cost; avoid misleading “0%” claims with hidden fees.
Adopt privacy-by-design: collect only what’s necessary; get valid consent; don’t access contacts/photos; keep a privacy notice and a complaints channel.
Under the FCPA, put in place an internal dispute-resolution process and log/resolve complaints within reasonable timelines.

12) FAQs

Q: The app says it will “blacklist” me and have me arrested. A: That’s harassment. Non-payment isn’t a crime. Report this behavior.

Q: They messaged my boss and family. A: That likely violates Data Privacy and SEC collection rules. Preserve evidence and complain to NPC and SEC.

Q: Interest is outrageous. Can I fight it? A: Yes. Courts frequently strike down or reduce unconscionable rates and penalties, and recompute what’s due.

Q: Can they garnish my salary or freeze my bank account? A: Only with a court judgment and proper legal process. Collectors cannot do this on their own.

Final takeaway

You have rights against harassment, shaming, and hidden charges. If an online lender crosses the line, document, secure your data, and use the right forum (SEC/BSP, NPC, police, and courts) to stop the abuse and correct your account.