Debt Collection Threats via Text Message: Legality Under Philippine Law
1. Why this topic matters
Unsecured consumer lending has exploded in the Philippines—especially through mobile-app lenders, buy-now-pay-later (BNPL) platforms, micro-finance entities, pawnshops and banks. Because most transactions are completed by phone, collection efforts also migrated to text (SMS, Viber, Messenger, WhatsApp etc.). While polite reminders are lawful, a growing number of collectors use threats, public shaming, or “contact-blasting” of the borrower’s relatives and Facebook friends. This note pulls together all the legal touch-points that govern (and punish) such conduct.
2. The basic rules on debt collection in the Philippines
| Source of law / regulation | Key take-aways for collectors | Remedies for debtors |
|---|---|---|
| Civil Code (Arts. 1159-1308) | Debts are civil obligations; payment may be demanded judicially but not through force, intimidation or abuse. | Debtor may sue for damages (Art. 19-21 on abuse of rights; Art. 1170 on culpa/ dolo). |
| Revised Penal Code (RPC) | • Grave threats (Art. 282) – imprisonment when a serious wrong or crime is threatened. • Light threats (Art. 283). • Unjust vexation (Art. 287) – harassment that annoys without legitimate purpose. • Coercion (Art. 286) – compelling another to do something against his will. |
File criminal complaint with the prosecutor’s office or PNP/ NBI cybercrime desks. |
| RA 10175 — Cybercrime Prevention Act (2012) | Extends crimes in the RPC to acts “committed through a computer system,” expressly including SMS. Penalties are one degree higher than their RPC counterparts (Sec. 6). Covers: • Cyber-threats • Cyber-libel (if collectors defame the debtor in group chats) • Computer-related harassment under catch-all Sec. 5(a). |
Same criminal remedies; NBI-CCD and PNP-ACG have jurisdiction. |
| RA 11765 — Financial Products and Services Consumer Protection Act (FPSCPA, 2022) + BSP Cir. 1133 (2021) | For BSP-regulated entities (banks, EMI, credit card issuers, BNPL), debt collection must avoid harassing, abusive or unfair practices (Sec. 3(l)). Circular 1133 itemizes prohibited acts: ‘contacting the borrower’s phone list, using threats or profane language, and publication of the debt.’ | • Write a formal complaint to the bank’s Consumer Assistance Unit (CAU). • Elevate to BSP Consumer Protection & Market Conduct Office (CPMCO); BSP may impose fines, suspend officers, or revoke license. |
| SEC Memo Circular 18, s. 2019 (and 19-2023) | Applies to lending companies and financing companies registered with SEC. Explicitly bans: (a) use of threats, insults, obscenities; (b) disclosure of borrower’s personal data to third parties; (c) contacting persons in the borrower’s directory other than guarantors; (d) any false representation of an impending arrest, suit, or garnishment. First offense → ₱25k-50k; third offense → license revocation. |
File a sworn complaint with SEC’s Corporate Governance and Finance Department; SEC may issue cease-and-desist orders and publish violators. |
| Data Privacy Act – RA 10173 + NPC Circular 16-02 | Text messages that process personal data (names, numbers, photos) must comply with data-privacy principles. Unauthorized disclosure of the debt or contact-mining of a borrower’s phone list = punishable processing under Sec. 25 (3-6 yr imprisonment + ₱1-5 M fine) when done for malice or wrongful gain. | File a complaint with the National Privacy Commission (NPC); NPC may issue compliance orders, fines, or criminal referral. |
| Telco / NTC rules (SIM Registration Act — RA 11934 (2022); NTC Memo 05-07-2002) | Telcos must keep SIM registries and may block numbers used for illegal or fraudulent collection. Spam or scam texts can be reported via #8888, NTC TEXT COMPLAINT, or the telco’s own consumer desk. | Free SIM blocking and criminal investigation upon complaint. |
3. How “threats” are defined in practice
| Conduct | Criminal exposure | Notes |
|---|---|---|
| “Mag-bayad ka o ipapapulis kita bukas” – Pay or I’ll have you arrested tomorrow | Grave threats if the collector has no legal right to cause arrest; else Light threats | Warrantless arrest is not allowed for civil debt. |
| Texting relatives: “Utang mo ipo-post ko sa Facebook” | Unjust vexation, Cyber-libel, Data-privacy breach, SEC/BSP sanctions | Public shaming is per se disallowed under SEC MC 18 and BSP Cir 1133. |
| “Mamamatay ka kapag di ka nagbayad” – You’ll die if you don’t pay | Grave threats (Art. 282 §2) if unconditional, plus Cybercrime Act. | Maximum penalty up to prision mayor. |
| Spamming 50-100 calls/ texts per day | Unjust vexation; harassment under SEC/BSP rules | Numeric thresholds are not fixed; pattern of nuisance suffices. |
| False claim of criminal case filed / fake “subpoena” screenshots | Estafa (Art. 315 2-a) or Unlawful Use of False Documents; SEC MC 18 breach | Also violates Art. 24(2) of the Civil Code on acts contrary to morals. |
4. The litigation landscape
- People v. Dandal (CA-G.R. CR-HC No. 02085, 2006) – upheld conviction for grave threats sent by text, confirming that SMS falls within “writing or sign” under Art. 282.
- People v. Eguia (G.R. 223123, 18 Aug 2020) – SC treated Viber messages as “electronic evidence” sufficient to prove unjust vexation and grave coercion.
- NPC CID Case No. 18-126 – NPC slapped ₱1 M fine on an online lending app for harvesting phone contacts and blasting them with collection threats.
- SEC Enforcement Action vs. Fynamics Lending (2022) – first license revocation purely on grounds of SMS harassment and privacy invasion.
- BSP Monetary Board Res. No. 347 (2023) – imposed ₱3 M fine on a thrift bank for abusive text-based collection through a third-party agency.
5. Defenses available to creditors
- Legitimate demand – A simple, courteous text reminding of due date is lawful.
- Qualified privilege – Communicating exclusively with the debtor (or a lawful guarantor) about the debt is an exercise of contractual right.
- Truth as defense to libel – Announcing a verified lawsuit or judgment may be privileged; but doing so before filing constitutes intimidation.
- Consent – If the debtor signed a specific, informed consent allowing SMS notices, the method (not the threats!) is allowed; NPC says “blanket contact-harvesting” is never valid consent.
6. Practical enforcement path for harassed debtors
Document everything: keep screenshots with metadata (number, timestamps).
Demand letter: send a cease-and-desist citing the rules above; collectors often back down once laws are quoted.
Regulatory complaint
- BSP → for banks, EMI, credit cards, BNPL.
- SEC → for lending/financing companies and collection agencies.
- NPC → for privacy violations.
Criminal action: File with PNP-ACG or NBI-CCD; include phone screenshots plus affidavit.
Civil suit: claim moral and exemplary damages; ask for temporary restraining order if harassment is continuous.
Telco remedies: request number blocking; report spam to NTC.
Costs & timelines
- Regulatory complaints are free; resolution in 30-60 days (SEC often issues a Show-Cause Order within two weeks).
- Criminal cases: Filing fee ≈ ₱500; preliminary investigation 3-6 months; trial 1-2 years.
- Civil action: Filing fee depends on amount of damages claimed; small-claims (< ₱400k) may be an option.
7. Compliance checklist for collectors & lenders
| Requirement | Authority | Concrete steps |
|---|---|---|
| Written Collection Policy disclosed to BSP/SEC | BSP Cir 1133 §16; SEC MC 18 §7 | Adopt a script; prohibit abusive language; keep call logs. |
| Third-party agency accreditation | BSP/SEC | Due diligence + contract requiring compliance; joint liability for violations. |
| Privacy Impact Assessment (PIA) | NPC Circular 16-02 | Ensure data minimization; delete contacts once loan is paid. |
| Opt-out mechanism for SMS | NTC Memo 03-03-2005 | Provide STOP keyword free of charge. |
| Staff training & audit | FPSCPA IRR | Annual training; audit trails preserved for 5 years. |
8. Emerging issues
- AI-generated “deep-fake summons” – sending fabricated e-court notices now qualifies as computer-related forgery under Sec. 5(b) of RA 10175.
- Cross-border collectors – overseas call centers that harass Philippine borrowers are still within SEC jurisdiction if acting for a Philippine-licensed lender; but service of subpoena relies on mutual legal assistance treaties.
- SIM Registration Act loopholes – collectors sometimes use prepaid SIMs bought with fake IDs; NTC now requires telcos to keep real-time analytics and auto-block numbers sending >100 identical texts/hour.
- Restorative approaches – BSP encourages “amicable repayment programs” (e.g., grace periods, restructuring) before any collection escalation, especially in post-pandemic context (MB Res. No. 581, 2024).
9. Key take-aways
- Threatening or shaming a debtor by text is seldom a “mere civil matter.” It can trigger criminal, administrative and privacy liability—and the cybercrime law makes penalties heavier.
- Multiple regulators overlap. Which one you run to depends on the creditor’s license (BSP, SEC) and whether personal data was abused (NPC).
- Collectors may still text, but only to the debtor, in polite, truthful language, during reasonable hours (8 AM-9 PM) and without false claims of arrest or litigation.
- Debtors should act quickly. Preservation of electronic evidence and prompt regulatory complaints stop the harassment faster than clogged courts.
- Compliance is cheap compared to penalties. A single abusive text can cost a lending company its entire business franchise.
This article incorporates the Revised Penal Code, RA 10175, RA 10173, RA 11765, BSP Circular 1133 (2021), SEC Memorandum Circular 18-2019 (as amended), the SIM Registration Act (RA 11934), and authoritative jurisprudence up to July 8 2025.