Debt-Collection Harassment in SPayLater (Philippines)

A Philippine-law primer for borrowers, collectors, and compliance teams (updated 31 May 2025)

1. Why this matters

Buy-Now-Pay-Later (“BNPL”) services such as SPayLater—the credit arm of Shopee’s SeaMoney group—have become a mainstream way to finance everyday purchases. Their speed and convenience, however, also create fertile ground for aggressive (and sometimes unlawful) collection tactics once a borrower falls behind. Because SPayLater is not a bank but a financing company that integrates e-wallet, lending, and payments infrastructure, it must navigate three separate regulatory perimeters:

Regulatory perimeter	Principal law / rules	Key regulator	Typical trigger
Lending / financing	✔ R.A. 9474 (Lending Company Regulation Act) + SEC MC 18-2019 & 10-2021	Securities and Exchange Commission (SEC)	Grant of consumer credit
Payments / e-money	✔ BSP circulars on e-money & BNPL (e.g., 1160-2023, 1136-2021)	Bangko Sentral ng Pilipinas (BSP)	Use of ShopeePay wallet to disburse/collect
Data privacy	✔ R.A. 10173 (Data Privacy Act) + NPC circulars	National Privacy Commission (NPC)	Access to a borrower’s phonebook, disclosure of debts

A collector that strays outside any of these regimes can be liable administratively, civilly, and criminally.

2. Core legal framework on abusive collection

Financial Products and Services Consumer Protection Act — R.A. 11765 (2022) Section 4(d) expressly outlaws “harassing, abusive or oppressive collection practices,” including but not limited to: threats of violence, use of profane language, contacting the consumer or his contacts at “unreasonable hours” (typically 8 p.m.–7 a.m.), humiliating or publicly shaming tactics, and misrepresentation of legal remedies. Violations may incur:
- Administrative fine: up to ₱2 million per transaction + disgorgement;
- Criminal penalty: up to 5 years’ imprisonment if done “willfully.”
SEC Memorandum Circular 18-2019 (Rules on Unfair Debt-Collection Practices of Financing & Lending Companies)
- Mirrors US-style FDCPA protections.
- Prohibits “contacting persons in the borrower’s contact list other than those provided as guarantors”; public disclosure of debts; or threatening arrest without legal basis.
- First offense: ₱25,000 fine; second offense: suspension; third: cancellation of Certificate of Authority + criminal referral.
BSP Circular 1160-2023 (BNPL & Digital Credit Providers)
- Applies to SPayLater as a “Digital Credit Provider” linked to an e-wallet.
- Requires a written, board-approved collection policy consistent with R.A. 11765.
- Mandates recording of all collection calls, retention for at least 2 years, and a dedicated complaints handling unit (CHU).
Data Privacy Act — R.A. 10173 (2012)
- Harvesting a borrower’s phone contacts without explicit, freely-given, and specific consent is illegal processing (punishable by 3-6 years’ imprisonment + fine up to ₱4 million).
- Unauthorized disclosure of debt status to third parties = unauthorized processing (§ 28) and may also be libelous if done online (R.A. 10175, Cybercrime Prevention Act).
Revised Penal Code
- Grave Coercion (Art. 286), Unjust Vexation (Art. 287), Slander/Libel (Arts. 358–366) squarely cover violent threats or public humiliation tactics.
- Penalties range from arresto menor to prision correccional plus civil damages.
Civil Code remedies
- Articles 19, 20, 21 (abuse of rights, acts contrary to law, and acts contra bonos mores) enable borrowers to sue for moral and exemplary damages.
- Article 26 protects privacy; Article 32 creates a cause of action for violation of constitutional rights (e.g., privacy of communication).

3. What counts as harassment? (Illustrative, not exhaustive)

Prohibited act	Typical SPayLater-era example	Primary legal hook
Threatening arrest, “CIDG warrant,” deportation	Collector texts: “Maghanda ka! Ina-arrange na namin ang pag-kulong mo.”	RPC Art. 286; R.A. 11765 §4(d)
Contacting borrower’s mother every 30 minutes	Auto-dialer spam during 11 p.m.–1 a.m.	SEC MC 18-2019 §4(a)
Posting on Facebook group: “Beware! Juan Dela Cruz is a scammer who owes Shopee!”	Public shaming	Data Privacy Act §25; Cyber-libel
Accessing the entire phonebook via the Shopee app without granular consent	“Hello, this is Shopee, your friend listed you as reference…”	Data Privacy Act §16 & §28
Misstating the amount due or adding secret “legal fees”	Invoice shows 10% “processing fee” never in disclosure statement	Truth in Lending Act (R.A. 3765); Civil Code Art. 1956

4. Borrower rights checklist

Demand identification. Legitimate SPayLater collectors must present a company ID, SEC registration, and proof of assignment if outsourced.
Request a Statement of Account. Under BSP Circular 1160 and R.A. 3765, you’re entitled to a free, itemised breakdown of principal, interest, penalties, and dates.
Dispute inaccurate charges. Written dispute temporarily suspends collection on the questioned amount pending investigation.
Limit contact hours. You may give written notice directing that calls be restricted to business hours or be made through a lawyer/representative.
Withdraw consent to data sharing. NPC Advisory Opinion 2021-06 confirms you may revoke permission for third-party contact harvesting; the collector must comply within a “reasonable period” (usually 10 days).
Record abusive calls. A party to the conversation may lawfully record it in PH (People v. Dela Cruz, G.R. 188900, 2017). Keep screenshots, audio files, timestamps.
Seek financial‐consumer relief. File with BSP Consumer Affairs (if an EMI-linked loan) or SEC Corporate Governance & Finance Department (if pure financing company). Both agencies accept online filings.
Pursue civil or criminal action. For serious threats or defamation, go to the Office of the Prosecutor; for damages, file a complaint or small-claims action in the MTC (≤ ₱1 million claim).

5. Enforcement landscape (2020-2025 snapshot)

Enforcer	Powers used vs. online lenders	Notable actions (publicly reported)
SEC	Compliance audits, fine, suspension, cease-and-desist, revocation	2023: Revoked 50 + OLP licenses; issued ₱1.5 M cumulative fines for “contact list harvesting”
BSP	Monetary penalties, directive to refund, cap on penalties, “prompt corrective” actions	2024: Imposed ₱12 M penalty on a major BNPL for unrecorded collection calls
NPC	Compulsory audit, order to delete unlawfully processed data, fine up to ₱5 million, criminal referral	2022: Ordered Shopee affiliate to purge 7 M contact entries sourced without informed consent
Courts	Award damages; issue injunctions; impose criminal liability	2025: Makati RTC awarded ₱500 k moral + ₱200 k exemplary damages vs. collector who posted debt status on FB

6. Duties of SPayLater & its third-party collectors

Written Collection Policy (BSP Circular 1160 §7): must define “unreasonable collection practices” and escalation thresholds.
Staff training on R.A. 11765 and SEC MC 18. Semi-annual certification required.
Data-minimisation: may access only the limited contact information explicitly authorised by borrower.
Call centre controls:
- Dialler must suppress calls 8 p.m.–7 a.m. (borrower’s local time).
- Maximum 3 connection attempts per day per number (SEC MC 18).
- Supervisor review of any account tagged “high-risk for harassment.”
Complaints tracking: 100 % of harassment grievances must be escalated to the CHU within 2 business days; quarterly summary submitted to BSP/SEC.
Independent audit: annual third-party audit on collection practices; findings furnished to board and regulators.

Tip for compliance officers: A single viral post alleging abusive calls can trigger multi-agency probes. Keep call logs, disclosure statements, and consent artefacts in a tamper-evident storage for at least 5 years.

7. Practical roadmap for aggrieved borrowers

Send a “Cease & Desist – Demand for Validated Debt” letter (registered mail + e-mail). State what conduct is harassing, request ledger within 5 days.
File online complaint to SEC or BSP (whichever supervises the account) attaching evidence.
Notify NPC if contacts were messaged without consent.
If threats are violent or defamatory, execute a Sworn Statement at the barangay/police; file grave coercion / unjust vexation / cyber-libel charges.
Consider payment restructuring: Under BSP’s consumer‐assistance rules, an open dispute does not stay the accrual of contractual interest, but collectors must suspend any harassment while the case is pending.
For small damage claims (≤ ₱1 million), file in the first-level courts under A.M. 08-8-7-SC (Revised Rules on Small Claims).

8. Defences & limits on borrower liability

Scenario	Borrower exposure	Possible defence
Collector adds 15 % “attorney’s fees” although no suit filed	Unenforceable; penalty clause requires actual suit or stipulation (Civil Code Art. 2208)	Invoke Medel v. CA (G.R. 131622, 1998): unconscionable stipulations void
Account compromised, fraudster used SPayLater	Liability limited to ₱1,000 if promptly reported within 3 days (BSP E-Money Regulations)	Document timeline; request charge-back
Collector refuses to accept partial payment	Tender of payment by cashier’s check or GCASH suffices to stop interest on the amount tendered (Civil Code Art. 1256)	Keep proof of tender

9. Forward look

Proposed Fair Debt Collection Practices Bill (pending in 19th Congress) seeks to extend R.A. 11765 rules to all creditors—including utilities and telcos—with stiffer fines up to ₱10 million.
The BSP is drafting a “Single Borrower Default Registry” for BNPL; once live, serial defaulters may find future loan approvals harder, reducing the temptation for collectors to shame debtors.
Generative-AI diallers raise fresh privacy concerns; regulators signal they will treat AI collectors as “agents” fully liable for abusive scripts.

10. Take-away summary

For borrowers	For collectors / SPayLater
• Know your rights: harassment is actionable under R.A. 11765, SEC MC 18, and the Data Privacy Act. • Keep evidence—screenshots and call recordings win cases. • Use regulator hotlines; they act fast on BNPL complaints.	• Adopt zero-harassment policy; one rogue call can cost millions and a licence. • Process only minimal borrower data, with granular consent. • Train staff and audit dialler logs; ignorance is no defence under Philippine law.

Bottom line: In today’s Philippines, speedy credit does not give licence to bully. The legal arsenal against debt-collection harassment is now robust, and both consumers and regulators are increasingly willing to deploy it.

This article is for general informational purposes only and should not be taken as formal legal advice. Consult qualified counsel for advice on specific facts.