In the Philippines, borrowers frequently receive aggressive calls, text messages, or visits from collectors demanding payment — or threatening severe consequences — even when no installment or amortizations is yet due or past due. These premature collection attempts, especially when accompanied by threats, are not only unethical but outright unlawful. This article exhaustively discusses the legal position on such practices under Philippine law, the specific prohibitions, the criminal and civil liabilities that arise, available remedies for borrowers, and landmark regulatory actions.

I. Fundamental Principle: A Debt Is Payable Only When It Is Due

Under Article 1159 of the Civil Code, obligations arising from contracts have the force of law between the parties and must be complied with in good faith. Article 1169 further provides that an obligation becomes demandable only when the due date arrives, unless demand is not required by law or stipulation.

Consequently:

A lender has no legal right to demand payment of principal or interest before the stipulated due date.
Any demand made before maturity is premature and unenforceable.
The borrower is under no obligation to pay early (except when an acceleration clause has been validly triggered by a prior default, which is not the case when no payment is yet due).

Threatening a borrower for refusing to pay a loan that is not yet due therefore constitutes an attempt to enforce a non-existent obligation.

II. Specific Regulatory Prohibitions on Premature and Abusive Collection

A. Lending Companies and Financing Companies (SEC-Regulated Entities)

SEC Memorandum Circular No. 18, series of 2019 (Prohibition on Unfair Debt Collection Practices of Financing Companies and Lending Companies) is the primary regulation governing non-bank lenders.

Key provisions:

The circular applies to collection of “overdue amounts” only. Collection efforts for accounts that are not yet overdue are implicitly and explicitly prohibited.
Even for overdue accounts, the following acts are strictly prohibited (and become doubly illegal when the account is current):

a. Use or threat of violence or criminal means to harm the borrower or his/her family or reputation
b. Use of obscenities, insults, or profane language amounting to a criminal offense
c. Public shaming or disclosure of the borrower’s alleged refusal to pay (except as allowed under the Credit Information System Act)
d. Threatening to take any action that cannot legally be taken (e.g., “We will file a case tomorrow,” “We will garnish your salary,” “We will seize your property” when no payment is yet due)
e. Contacting persons in the borrower’s contact list other than references or immediate family members indicated in the loan application
f. Harassment by calling at unreasonable hours or in an excessive manner

Violations of SEC MC No. 18, s. 2019 are punishable by administrative fines of up to ₱1,000,000 per violation and possible revocation of the lender’s Certificate of Authority.

B. Banks, Quasi-Banks, and Their Collection Agencies (BSP-Regulated Entities)

BSP Circular No. 454, series of 2004, as amended by Circular Nos. 702 (2010), 854 (2014), 900 (2015), 941 (2017), and 1137 (2021) impose virtually identical prohibitions on banks and their third-party collectors.

BSP regulations explicitly state that collection activities shall be undertaken only on past due accounts. Collectors are prohibited from:

Resorting to intimidation or threats of violence, criminal prosecution, or any act that cannot legally be taken
Using obscene or profane language
Disclosing borrower information to unauthorized persons
Contacting the borrower at unreasonable hours (generally before 7:00 a.m. or after 7:00 p.m. on weekdays; stricter on weekends)

Violations may result in monetary penalties, suspension, or permanent disqualification of the bank or collection agency from BSP accreditation.

C. Republic Act No. 11765 (Financial Products and Services Consumer Protection Act of 2022)

Section 4 prohibits “unfair, abusive, or deceptive conduct” in the marketing, sale, and servicing of financial products, including collection.

Section 17 imposes administrative fines of up to ₱5,000,000 per day for continuing violations and personal liability on directors and officers who knowingly permit abusive practices.

Premature collection with threats clearly falls under “abusive conduct.”

III. Criminal Liabilities Arising from Premature Threatening Collection

Collectors who go beyond mere demands and resort to threats commit separate criminal offenses under the Revised Penal Code:

Grave Threats (Art. 282) – threatening death, serious injury, or property destruction; punishable by prisión correccional (6 months–6 years)
Light Threats (Art. 283) – threatening lesser harm; punishable by arresto mayor (1–6 months)
Other Light Coercion (Art. 287) – compelling the borrower to do something against his will (e.g., pay early) by means of threats without authority of law
Grave Coercion (Art. 286) – when violence or intimidation is used to prevent the borrower from doing something not prohibited by law (e.g., refusing to pay early)
Unjust Vexation (Art. 287, par. 2) – the catch-all provision for annoying or harassing conduct; frequently used against abusive collectors
Oral Defamation/Slander by Deed (Arts. 358–359) – public shaming or humiliating visits to workplace or residence
Violation of Republic Act No. 10175 (Cybercrime Prevention Act) – when threats are sent via text, Messenger, Viber, etc., the penalty is increased by one degree
Violation of Republic Act No. 10173 (Data Privacy Act of 2012) – unauthorized processing or disclosure of personal information (e.g., sending messages to contacts saying “Your friend owes us money”) is punishable by imprisonment of up to 6 years and fines up to ₱4,000,000

Numerous collectors and online lending app agents have been arrested and convicted under these provisions in recent years.

IV. Special Case: Online Lending Applications

From 2018–2023, the SEC and the NPC received thousands of complaints against online lending apps for exactly this practice: sending threatening messages days or weeks before the due date, contacting all phone contacts, posting morphed obscene photos, and threatening criminal cases.

The SEC has revoked or suspended the certificates of authority of over 3,000 online lending entities since 2020 for unfair collection practices. Many apps (e.g., those using “blast messaging” to contacts) have been permanently banned.

The Supreme Court in G.R. No. 258702 (Geronimo v. People, 2022) and related cases has consistently upheld convictions of online lending collectors for unjust vexation and grave threats even when the loan was only a few days overdue — the same principles apply with greater force when no payment is yet due.

V. Remedies Available to Borrowers Facing Premature Threats

Immediate Remedies
- Ignore the demand (the debt is not yet demandable).
- Block the collector’s numbers and report to the lender’s compliance officer.
- Demand in writing that all communication cease except through proper legal channels.
Administrative Complaints (fastest and most effective)
- Against lending/financing companies → SEC Consumer Assistance and Protection Division (capd@sec.gov.ph)
- Against banks → BSP Consumer Protection Department (consumeraffairs@bsp.gov.ph or hotline 8708-7087)
- Against online lenders → SEC Enforcement and Investor Protection Department
These agencies can impose immediate cease-and-desist orders and heavy fines.
Criminal Complaints
- File directly with the barangay, city prosecutor, or police cybercrime unit.
- Screenshots, recordings, and call logs are strong evidence.
Civil Action for Damages
- Sue for moral, exemplary, and actual damages plus attorney’s fees under Articles 19, 20, 21, 26, 32, 33, and 34 of the Civil Code (abuse of rights, acts contra bonus mores, violation of privacy and human dignity).
- Many borrowers have been awarded ₱100,000–₱500,000 in moral damages in successful cases.
Data Privacy Complaint
- File with the National Privacy Commission (complaints@privacy.gov.ph). Successful complaints often result in multimillion-peso fines against the lender.
Counter-claim if sued
- If the lender eventually files a collection case after the loan becomes due, the borrower may file a counterclaim for damages caused by the premature harassment.

VI. Conclusion

Under Philippine law, any collection activity — much more so when accompanied by threats — for a loan that is not yet due is illegal, unenforceable, and exposes the lender and its agents to severe administrative, civil, and criminal liabilities.

Borrowers are fully protected by the Civil Code, SEC and BSP regulations, the Financial Consumer Protection Act, the Revised Penal Code, the Data Privacy Act, and the Cybercrime Prevention Act. Premature collection threats are not merely “aggressive business practice” — they are crimes and regulatory violations that authorities actively prosecute.

No borrower should ever feel compelled to pay early because of threats. Report them immediately. The law is unequivocally on the borrower’s side when no payment is yet due.