Dealing with Harassment from Lenders in the Philippines
A practical and legal guide
Disclaimer: This article is for general information only and is not a substitute for personalized legal advice. Laws and regulations change; consult a Philippine lawyer or the appropriate regulator for your specific case.
1. Why “Harassment” Matters
Harassment by a lender — whether a bank, financing or lending company, credit‑card issuer, cooperative, or a third‑party collection agency — undermines the borrower’s constitutional rights to dignity, privacy, and due process. Philippine regulators have declared abusive collection tactics illegal, and both criminal and administrative liabilities may attach to violators.
Typical forms include:
| Category | Usual Conduct |
|---|---|
| Threats & Intimidation | Violence, arrest threats, criminal case “scare tactics,” public humiliation |
| Repetitive or Odd‑Hour Contact | Calls before 6 a.m./after 9 p.m., ringing multiple times daily, SMS “blasts” |
| Contacting Third Parties | Messaging employers, co‑workers, Facebook friends, or all phone contacts |
| Public Shaming | Posting a borrower’s face on social media, group chats, or “wanted” boards |
| Data Misuse | Pulling contact lists, photos, or location data from a mobile‑lending app |
| Foul / Obscene Language | Cursing, insults, gender‑based slurs |
2. Core Legal Framework
| Measure | Coverage | Key Provisions on Harassment |
|---|---|---|
| Republic Act (RA) 11765 – Financial Products and Services Consumer Protection Act (2022) | Banks and all BSP‑‑supervised financial institutions (BSFIs) | Makes “harassment, abuse, or any deceptive collection practice” a prohibited conduct (Sec. 4 & 10). Penalties: up to ₱2 million fine or 5 years’ imprisonment, plus administrative sanctions. |
| SEC Memorandum Circular (MC) 18‑2019 | Lending & financing companies | Flatly bans (a) threats, (b) use of foul language, (c) contacting persons other than the borrower, guarantor, or spouse, (d) disclosure of the debt to unrelated parties, (e) calls outside 6 a.m.–9 p.m., (f) publishing the debtor on “blacklists,” etc. Non‑compliance leads to license revocation, fines, and criminal referral. |
| RA 10173 – Data Privacy Act (2012) | All personal‑data processing entities | Accessing a debtor’s phonebook/photos without valid consent may amount to “unauthorized processing” (Sec. 25) and “malicious disclosure” (Sec. 32). Penalties: up to ₱5 million fine and 7 years’ imprisonment. |
| BSP Circulars 1048 (2019) & 1160 (2023) | BSFIs | Embed Consumer Protection Standards: fair treatment, privacy, transparency, and a Financial Consumer Assistance Mechanism (FCAM) to resolve complaints within 15 business days. |
| RA 9474 – Lending Company Regulation Act (2007) | Non‑bank lenders | Lenders must possess an SEC license; “unfair practices” grounds for revocation. |
| Revised Penal Code | All persons | • Art. 287 Unjust Vexation – any act annoying or irritating without justification. • Art. 282 Grave Threats – threats of bodily harm. • Arts. 355 & 358 – libel and slander for public shaming. |
| RA 10175 – Cybercrime Prevention Act (2012) | Online acts | Elevator: offenses above become cyber‑libel / cyber threats if committed via ICT; penalties are one degree higher. |
| RA 7394 – Consumer Act (1992) & Civil Code Arts. 19‑21, 26 & 32 | All sectors | Recognize the consumer’s right to be protected against deceptive, unfair and unconscionable acts; allow suits for moral and exemplary damages. |
3. Regulators & Where to Complain
| Entity | Jurisdiction | How to File |
|---|---|---|
| Securities and Exchange Commission (SEC) – Financing & Lending Oversight Division | Licensed lending/financing companies & their collection agents | E‑mail complaint form (with ID, contract, screenshots) to flcd_queries@sec.gov.ph or through the SEC Complaint Form portal. SEC issues subpoenas, show‑cause orders, fines, or revokes the company’s Certificate of Authority. |
| Bangko Sentral ng Pilipinas (BSP) – Consumer Empowerment Group | Banks, credit‑card firms, e‑money issuers, digital banks | File via BSP Online Buddy (BOB) chatbot, e‑mail consumeraffairs@bsp.gov.ph, or dial (02) 8708‑7087. The BSFI has 7 days to respond; BSP may impose sanctions under RA 11765. |
| National Privacy Commission (NPC) | Data‑privacy violations | Use the NPC Complaint Management System within 12 months of discovery; NPC may direct a STOP PROCESSING ORDER and impose fines/imprisonment. |
| Cooperative Development Authority (CDA) | Credit/cooperatives | Submit verified complaint to the CDA regional office; CDA can suspend or cancel the coop’s certificate. |
| Local Barangay Lupon (Punong Barangay) | Civil or criminal acts below ₱400 k (except when public officer is involved) | Mandatory conciliation for unjust vexation, slight threats, slander, or civil damages unless urgent. |
| Office of the City/Provincial Prosecutor | Criminal prosecution | Execute an affidavit; prosecutor may file Information in court for unjust vexation, threats, libel, Data Privacy Act offenses, etc. |
4. What Counts as “Prohibited Collection Practice”?
Below is the distilled list from SEC MC 18‑2019, BSP Circular 1160 ‑ Annex A, and RA 11765:
- Threats of violence, detention, or criminal prosecution
- Use of obscenities, insult, or gender‑based degrading remarks
- Contacting borrower’s contacts, employer, or social‑media followers without written consent
- Publicly posting or broadcasting the borrower’s debt or personal data
- Calling or messaging before 6 a.m. or after 9 p.m. (borrower’s local time)
- Using more than one collection account, number, or persona to pressure repayment
- Falsely claiming to be a lawyer, police, or government official
- Threatening to “blacklist” the borrower from future loans, employment, or travel
- Charging unconscionable interest or “penalty stacking” beyond the agreed contract or statutory caps (e.g., for salary loans under BSP Circular 1133)
- Seizing or threatening to seize salary or ATM cards without a court order
5. Your Rights & Immediate Defensive Steps
- Demand Verification – Ask the collector to send a Statement of Account and their written authority to collect.
- Keep Evidence – Save call logs, voicemails, texts, Viber/FB Messenger screenshots, and take screen‑recordings. Philippine law generally allows one‑party consent recording (you can record your own call) without violating the Anti‑Wire‑Tapping Act (RA 4200).
- Cease‑and‑Desist Letter – Send a notarized letter citing SEC MC 18‑2019 or RA 11765 and warning that further harassment will be reported. Send by registered mail or e‑mail and keep the registry receipt.
- Block & Document – You may block the number after notifying them in writing. Continue to document any new “dummy” numbers they use.
- Use Internal Dispute Routes – All BSFIs must maintain an FCAM (e.g., bank customer‑care desk). File the complaint first; escalate to BSP or SEC if unresolved.
- Consider Debt Restructuring or Mediation – You can ask the creditor for a restructure plan or avail of Barangay mediation (often faster and less adversarial).
- File Regulatory Complaints – Provide your evidence bundle, contract, IDs, and computation of disputed amounts.
- Seek Criminal or Civil Action – When threats, libel, or privacy violations are egregious.
6. Possible Liabilities of the Harassing Lender
| Law / Regulation | Administrative | Criminal | Civil |
|---|---|---|---|
| RA 11765 | BSP (or SEC/IC) fines up to ₱2 M, suspension/revocation of license, orders to refund charges | Imprisonment of up to 5 years (court‑imposed) | Consumer may sue for actual, moral, exemplary damages & attorney’s fees |
| SEC MC 18‑2019 | License revocation, daily fines (₱25k–₱50k), cease‑and‑desist orders | SEC may endorse to DOJ for prosecution under RA 9474 (₱10k–₱50k fine + 6 mos.–10 yrs. imprisonment) | Same damages as above |
| Data Privacy Act | NPC fines up to ₱5 M, stop‑processing order | Imprisonment up to 7 yrs. | Civil suit under Sec. 35 |
| Revised Penal Code | N/A | Arresto menor to prision mayor, plus fine (threats, unjust vexation, libel) | Civil liability ex delicto |
| Cybercrime Act | N/A | Penalty one degree higher than predicate crime | Same |
7. Filing a Complaint – Step‑by‑Step (SEC Example)
- Gather – Contract, screenshot evidence, IDs, timeline.
- Download SEC Complaint Form (SCD‑1) and fill in details.
- Attach documentary proof (PDF or zip if via e‑mail).
- E‑mail to flcd_queries@sec.gov.ph or file through the SEC Electronic Filing and Monitoring System (EFMS).
- Wait for Assessment Notice – SEC issues a tracking number within ~3 working days.
- Respond to Orders – If SEC issues a Show Cause Order to the company, you may be asked for a rejoinder or to appear at a conference.
- Decision – SEC may fine, suspend, or revoke the lender’s license; it may also recommend criminal prosecution. Note: Simultaneously, you may pursue BSP/NPC complaints or a direct court case; one does not bar the other.
8. Frequently Asked Questions
| Question | Brief Answer |
|---|---|
| Can I be jailed for unpaid debt? | No. The 1987 Constitution (Art. III Sec. 20) forbids imprisonment for debt or non‑payment of a poll tax. |
| The collector threatened to post my picture online—legal? | Illegal. SEC MC 18‑2019 and the Revised Penal Code on libel prohibit public shaming. |
| They accessed my phone contacts through the app; is that allowed? | Only if you gave informed, freely‑given consent. Bulk harvesting of contacts for harassment violates the Data Privacy Act. |
| What interest rate is legal? | There is no single ceiling, but the BSP can cap interest for particular products (e.g., 4%/month for credit‑card interest effective 2023). Unconscionable rates can be voided by courts under Art. 1229 Civil Code. |
| Will a cease‑and‑desist letter stop the calls? | It often does. It also strengthens a later complaint by showing the collector willfully ignored notice. |
| Can I record calls? | Yes, as a party to the call you may record without violating RA 4200. Do not record if you’re not a party or without the parties’ consent. |
| Does filing a complaint stop collection? | No; it only prohibits unfair collection. The lender may still sue for the debt, but must observe fair processes. |
9. Practical Tips to Minimize Exposure
- Read the Fine Print – Check the app’s privacy notice and consent clauses before borrowing.
- Use Official Channels – Pay through bank transfer or the lender’s portal to avoid “middle‑man” collectors.
- Separate Contact Numbers – Use a dedicated number/e‑mail for loan applications.
- Financial Planning – Explore debt‑consolidation and loan restructuring early; BSP‑supervised banks are encouraged to offer relief (BSP Circular 1133, Interim Relief for COVID‑19 extended guidance).
- Community Support – Some LGUs and NGOs (e.g., Credit Counselling Philippines, church‑based social action centers) offer free financial‑literacy and legal clinics.
10. Recent Enforcement Notes
- 2023 – SEC shut down 11 online lending apps for continued harassment and privacy violations, revoking their Certificates of Authority.
- 2024 – BSP imposed ₱12 million in penalties on a universal bank for repeated failure to act on harassment complaints under RA 11765.
- 2025 – NPC issued its first Cease‑and‑Desist Order against a collection agency that scraped borrowers’ Facebook photos to create “debt‑shaming” memes.
(These examples are for illustration; verify the current status with each regulator.)
11. Conclusion
Harassment is never a lawful collection method in the Philippines. The law gives borrowers robust protection through:
- Clear prohibitions on abusive tactics
- Multiple enforcement venues (SEC, BSP, NPC, Prosecutor’s Office, and the courts)
- Substantial penalties (fines, license revocation, imprisonment)
Knowing your rights, documenting every incident, and invoking the appropriate regulator quickly are your best shields against abusive lenders.