A Doctrinal and Practical Guide

I. Why This Issue Comes Up

In the Philippines, people who fall behind on credit card payments are often:

Hounded by collection agents; and
Threatened with “estafa” cases or “pagkakakulong sa utang.”

This raises the real concern:

“Can I be criminally charged with estafa just because I failed to pay my credit card debt? And if they do file, how do I defend myself?”

Legally, there is a sharp distinction between:

Non-payment of debt (primarily a civil matter); and
Fraud (estafa), which is a criminal offense.

Understanding this distinction is the core of your defense strategy.

(This is an educational discussion, not a substitute for advice from your own Philippine lawyer.)

II. Constitutional and Legal Framework

1. Constitutional Protection: No Imprisonment for Debt

The 1987 Constitution, Article III, Section 20 provides:

“No person shall be imprisoned for debt or non-payment of a poll tax.”

Key idea: If your only “offense” is that you borrowed money (or used credit) and later could not pay, you cannot be jailed simply for that.

However, this does not protect you if:

You committed fraud,
Used deceit or false pretenses, or
Committed acts penalized under criminal law (Revised Penal Code, special laws).

That’s where estafa and related offenses can come in.

2. Estafa Under the Revised Penal Code

Estafa (swindling) is mainly found in Article 315 of the Revised Penal Code. It generally punishes:

Deceit or abuse of confidence,
Causing damage or prejudice to another.

Classically, estafa involves things like:

Issuing checks with intent to defraud,
Misappropriating money received in trust,
Using fictitious names or false pretenses to obtain money.

For credit card issues, banks sometimes invoke estafa but not every unpaid credit card balance fits its elements.

3. Access Devices Regulation: RA on Credit Cards and Fraud

There is a special law (the Access Devices law), which penalizes fraudulent use of:

Credit cards,
ATM cards,
Other “access devices.”

This law targets fraudulent acts involving cards, such as:

Using stolen or counterfeit cards;
Using another person’s credit card without authority;
Applying for a card under false identity or with falsified documents;
Using a card knowing it has been revoked or cancelled, with intent to defraud.

Still, mere inability to pay due to genuine financial difficulty, without fraud, is not the main target of these criminal provisions.

III. Civil vs. Criminal Aspects of Credit Card Non-Payment

1. Primarily a Civil Obligation

A credit card agreement is fundamentally a contract. When you use the card:

You incur a debt to the issuing bank.
If you fail to pay, you are in breach of contract, which gives the bank the right to:
- Charge interest and penalties,
- Sue you for sum of money (civil case),
- Report you to credit bureaus, etc.

This is civil liability, not automatically criminal.

2. When Banks Threaten “Estafa”

Collection agencies and some bank letters may say:

“Magpa-file kami ng estafa,”
“Makukulong ka dahil sa utang,”
“Criminal case ito, hindi lang civil.”

Often, this is used as pressure tactic. For estafa or related criminal liability to prosper, the prosecution MUST prove specific elements of fraud — not just non-payment.

IV. Elements of Estafa in the Credit Card Context

For a typical estafa case, prosecution must show:

There was deceit or abuse of confidence
- Example: You lied or used false pretenses to convince the bank to issue the card or increase the limit, or you used a card under circumstances amounting to fraudulent misrepresentation.
The deceit was prior or simultaneous with the transaction
- Deceit must exist at the time credit was extended or when you incurred the obligation, not merely after you later became unable to pay.
The offended party suffered damage
- The bank lost money as a direct result of your fraudulent act.

This is very different from the situation where:

You truthfully applied for a card,
Used it normally,
Then later lost your job or business and could no longer pay.

In that common scenario, deceit is usually absent, and the matter is civil, not criminal.

V. When Credit Card Use Can Lead to Criminal Liability

Although simple non-payment is civil, certain behaviors involving cards can trigger criminal exposure:

1. Fraudulent Application

Using a fake identity,
Submitting forged documents (falsified payslips, IDs, COEs),
Concealing material facts in a manner intended to deceive the bank.

Here, the bank could allege you never intended to pay and obtained the card through deceit.

2. Use of Stolen / Lost / Counterfeit Cards

Possessing or using a card not issued to you,
Continuing to use a card you found or stole,
Using cloned or altered cards.

These acts focus on unauthorized use, not mere non-payment.

3. Use of Revoked Card With Intent to Defraud

If:

The bank has clearly revoked or cancelled your card,
You were notified of the revocation,
Yet you continue using the card knowing you no longer have authority and no intent to pay,

this can be argued as fraudulent use.

4. Schemes Showing Pre-Existing Intent to Defraud

Example scenarios:

Repeated cash advances at maximum limits in a short period, with evidence of plans to abscond;
Use of multiple cards to create a pyramid of debt, with indications you never intended to pay any of them.

Even then, the prosecution must prove intent to defraud, not just poor financial planning.

VI. Core Defenses Against Estafa for Unpaid Credit Card Debt

If a criminal complaint for estafa (or related offenses) is filed or threatened, defenses typically fall into:

Substantive defenses (no crime committed), and
Procedural/evidentiary defenses (case defective in form or proof).

A. Substantive Defenses (No Estafa, Only Civil Debt)

1. Absence of Deceit at the Time of Contract

You can argue:

You provided true information in your application (name, age, income, employer).
You had genuine capacity to pay when the card was issued.
You used the card in the usual course (groceries, bills, emergencies).

If your inability to pay arose from:

Job loss,
Business closure,
Illness,
Family emergencies,

these are evidence of good faith, inconsistent with criminal intent.

2. Debt is Purely Civil

Emphasize that the dispute concerns:

Failure to pay contractual obligations,
Without misappropriation of entrusted funds or unauthorized use.

You may invoke:

Constitutional prohibition on imprisonment for debt (showing the law’s policy) and
Doctrine that “non-payment of obligation is not, by itself, estafa.”

3. Lack of Damage as Defined in Law (or Disputed Amount)

Damage must be actual and provable. Defenses include:

Bank’s computation is erroneous or inflated (unconscionable interest and penalties).
You already made substantial payments, reducing or extinguishing the alleged loss.
Amount claimed includes invalid or illegal charges.

Arguably, there is a live civil accounting dispute, not clear criminal damage.

4. Absence of Intent to Defraud

Intent to defraud must be clearly shown. You may show:

History of regular payments before financial hardship;
Attempts to negotiate restructuring;
Emails or calls offering to pay in installments, showing genuine effort.

Courts typically look at behavior over time. A debtor who struggles but repeatedly tries to pay is not a swindler.

B. Defenses Against Specific Theories of Estafa or Access Device Fraud

1. Alleged Falsified Application

Defense lines:

Document authenticity: you did not falsify any signature or record.
Any error was clerical or innocent, not intentional.
The bank had independent verification (e.g., HR verification), undermining the claim that your representation was the sole basis.

2. Alleged Unauthorized Use

If accused of using a card not yours:

You had express or implied authority (e.g., supplementary cardholder, spouse or family authorization).
Transactions were actually yours, not fraudulent; you just ended up unable to pay.

3. Alleged Use of Revoked Card

Defense:

You were not properly notified of revocation (no letter, email, or text received, or notice came late).
Transactions in question occurred before effective revocation.
You believed, in good faith, that the card was still valid, and planned to pay under normal terms.

C. Procedural and Evidentiary Defenses

1. Lack of Probable Cause

At preliminary investigation with the prosecutor, you can:

File a counter-affidavit,
Attach supporting documents (billing statements, payment records, letters of negotiation),
Argue that the complaint fails to show:
- Deceit at the time of issuance or use;
- Any intentional misrepresentation;
- Criminal, as opposed to civil, liability.

The goal is to convince the prosecutor to dismiss the complaint or not file an Information in court.

2. Defective or Vague Complaint

Possible issues:

Complaint fails to specify exact acts of deceit;
It merely recites non-payment and threats;
It does not clearly identify which transactions are allegedly fraudulent and why.

Criminal charges must be specific enough for you to know the accusation and defend yourself.

3. Violation of Due Process / Illegal Threats

Sometimes, complaints are marred by:

Harassment,
Threats of arrest without warrant,
Misrepresentation by agents (claiming they are “court sheriffs” or “NBI” when they are not).

While harassment alone may not void a case, it can:

Show bad faith and improper collection practices;
Lead you to file counter-complaints (e.g., for grave threats, unjust vexation, violation of fair collection rules).

VII. Related Risk: Bouncing Checks (B.P. 22) Issued for Credit Card Payments

Some cardholders submit post-dated checks (PDCs) to cover monthly payments. If a PDC bounces, you face possible B.P. 22 liability (bouncing checks law).

Key Elements of B.P. 22

You issued a check to apply on an obligation;
It was dishonored for insufficiency of funds or closed account;
You were notified of dishonor and failed to pay within the grace period after notice.

B.P. 22 is a separate offense from estafa. Defense strategies include:

Questioning the validity of notice of dishonor;
Showing payment or settlement within the grace period;
Challenging the existence of debt or authority to issue.

But note: Credit card debt alone, without checks, does not trigger B.P. 22.

VIII. Practical Steps If You’re Threatened With or Facing an Estafa Case

Don’t ignore written notices from prosecutors or courts.
- If you receive a subpoena, order, or notice of preliminary investigation, respond within the deadline. Silence can lead to the case proceeding without your side.
Gather and organize all documents:
- Credit card statements
- Receipts and proof of payments
- Letters/emails to and from the bank or collectors
- Any proof of job loss, illness, or calamity causing financial hardship
Prepare a narrative showing good faith:
- Timeline of when you got the card, how you used it, when hardship began, and how you tried to pay or negotiate.
Consult a Philippine lawyer as early as possible.
- Especially one familiar with criminal defense and banking/credit cases.
- Your lawyer can draft a strong counter-affidavit and identify technical and substantive defenses.
Be careful with statements to collectors.
- Don’t sign “admissions” or “confessions” without fully understanding them.
- Avoid saying anything that sounds like you never intended to pay.
Explore civil settlement if feasible.
- Even when a criminal complaint has been filed, settlement or compromise can:
  - Reduce pressure;
  - Sometimes lead to complainant’s desistance or more lenient treatment.
Keep records of harassment or abusive tactics.
- If agents harass you (e.g., public shaming, threats, impersonating government officials), keep screenshots and recordings (where lawful).
- These can support complaints before regulators or law enforcement.

IX. Key Takeaways

Non-payment of credit card debt, by itself, is NOT estafa.
- It is a civil breach of contract.
- The Constitution bars imprisonment for mere debt.
Estafa or access device fraud arises only when there is proven deceit or fraudulent conduct, such as:
- Falsified identity or documents,
- Unauthorized card use,
- Knowing use of revoked cards with intent to defraud.
Defenses focus on showing:
- No deceit at the time of card issuance or use;
- Good faith and genuine financial difficulty;
- Disputed or miscomputed damage;
- Procedural defects in the complaint.
Collection threats of “estafa” are often bluff or pressure.
- Still, any actual criminal complaint must be treated seriously and answered properly.
You always remain liable civilly for legitimate unpaid credit card debts (unless settled or otherwise extinguished), but civil liability is different from criminal guilt.
Early legal consultation and organized documentation can make the difference between:
- A dismissed criminal complaint, and
- A case that escalates unnecessarily.

In essence, defending against an estafa charge for unpaid credit card debt in the Philippines rests on reasserting the line between debt and fraud. If your story is one of debt without deceit, the law is fundamentally on your side — but you must assert that protection clearly and timely through proper legal defense.