Debt Collection Threats via Text Message: Legality Under Philippine Law

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

  1. 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.
  2. People v. Eguia (G.R. 223123, 18 Aug 2020) – SC treated Viber messages as “electronic evidence” sufficient to prove unjust vexation and grave coercion.
  3. 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.
  4. SEC Enforcement Action vs. Fynamics Lending (2022) – first license revocation purely on grounds of SMS harassment and privacy invasion.
  5. 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

  1. Document everything: keep screenshots with metadata (number, timestamps).

  2. Demand letter: send a cease-and-desist citing the rules above; collectors often back down once laws are quoted.

  3. Regulatory complaint

    • BSP → for banks, EMI, credit cards, BNPL.
    • SEC → for lending/financing companies and collection agencies.
    • NPC → for privacy violations.
  4. Criminal action: File with PNP-ACG or NBI-CCD; include phone screenshots plus affidavit.

  5. Civil suit: claim moral and exemplary damages; ask for temporary restraining order if harassment is continuous.

  6. 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

  1. 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.
  2. Multiple regulators overlap. Which one you run to depends on the creditor’s license (BSP, SEC) and whether personal data was abused (NPC).
  3. 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.
  4. Debtors should act quickly. Preservation of electronic evidence and prompt regulatory complaints stop the harassment faster than clogged courts.
  5. 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.

Disclaimer: This content is not legal advice and may involve AI assistance. Information may be inaccurate.