Filing a Complaint Against Online Lending Apps for Excessive Charges in the Philippines
A comprehensive legal guide (updated June 2025)
1. Why this matters
The explosion of mobile “cash-loan,” “salary-loan,” and “buy-now-pay-later” apps has given millions of Filipinos fast access to credit—but has also spawned abusive practices: triple-digit effective interest, hidden “processing” fees, and harassing collection tactics. Philippine law gives borrowers concrete rights and multiple complaint avenues. This article gathers everything you need to know, from the legal foundations to step-by-step filing instructions.
2. Key legal foundations
| Law / Issuance | Core protection |
|---|---|
| Republic Act 3765 – Truth in Lending Act (TILA, 1963) | Full, written disclosure of the annual interest rate and all finance charges before a loan is perfected. |
| RA 9474 – Lending Company Regulation Act (LCRA, 2007) + IRR (SEC MC 9-2013) | SEC licence, capitalization, disclosure, and record-keeping duties for all non-bank lenders. |
| RA 11765 – Financial Consumer Protection Act (FCPA, 2022) + BSP Circular 1133 s. 2022 | Broad, cross-sector consumer rights; empowers BSP/SEC/IC/PDIC to adjudicate and impose up to ₱ 2 million per violation or 0.1 % of assets, whichever is higher. |
| SEC MC 18 s. 2019 & 19 s. 2022 | Special rules for online lending platforms: cap on total cost at 1%/day, ban on “contact scraping,” mandatory complaint channel & privacy notice, “3-day” cooling-off period, and app registration before publication in app stores. |
| Monetary Board Resolutions 419 & 1729 (2021) | Set interest + penalties cap for short-term, small-value loans at 6%/month total cost, penalty interest limited to 1%/month of outstanding principal. |
| Civil Code arts. 1306, 1229 (unconscionability doctrine) | Courts may strike down or reduce “excessive, iniquitous, unconscionable and contrary to morals” interest/charges. |
| RA 10173 – Data Privacy Act | Outlaws “contact scraping” and public shaming of contacts; fines up to ₱ 5 million + imprisonment. |
| RA 7394 – Consumer Act | Deceptive or unconscionable sales acts punishable by DTI up to ₱ 300 k + closure. |
| RA 10175 (Cybercrime), RPC arts. 287-288 | Criminal liability for on-line grave threats, unjust vexation, libel during collections. |
3. What counts as “excessive” or “unconscionable” charges?
- Total cost (interest + fees + penalties) beyond 6 % per month for salary-finance or micro-loans (per BSP caps).
- Undisclosed “service,” “facilitation,” or “late-posting” fees deducted before release.
- Penalty interest > 1 %/month or computed on an accelerated (future) balance.
- Collection fees not stipulated in the contract or > actual costs.
- Double imposition (e.g., interest and penalties and separate “liquidated damages” on the same principal).
- Compounding more than once per month without express, informed consent.
- Application fees charged even if the loan is disapproved or cancelled within 3 days (violates SEC MC 18).
The Supreme Court has repeatedly voided or reduced rates from 66 % p.a. (Spouses Abella v. Spouses Cruz, G.R. 150172, 2003) to 240 % p.a. (Macalinao v. BPI Family, G.R. 184692, 2009), calling them “shocking to the conscience.”
4. Your rights as a borrower
| Right | Source | Practical meaning |
|---|---|---|
| Full cost disclosure in pesos and % p.a. | TILA §4; SEC MC 9-2013 | Demand a summary box showing principal, annual interest rate, all fees, and effective cost. |
| Right to rescind within 3 days (online loans) | SEC MC 18-2019 §6 | Cancel without charges if no funds were disbursed or repaid in that window. |
| Fair, respectful collection | FCPA; SEC MC 18-2019; BSP Memo M-2022-044 | No threats, profanity, public shaming, or contacting non-guarantor relatives/co-workers. |
| Data-privacy protection | RA 10173 | App must collect only necessary data; no “contact scraping” without freely given, informed, specific consent. |
| Speedy, free redress | FCPA §§11-13 | File with regulator and get a written decision (SEC/BSP) normally within 90 days. |
| Civil remedy for refund + damages | Civil Code arts. 19-21, 1176; FCPA §14 | Sue for overpayments, moral and exemplary damages, attorney’s fees. |
5. Step-by-step complaint pathways
Tip: Document everything—screenshots, e-mails, SMS, call recordings, app transactions, receipts. Save a PDF of the loan disclosure screen before signing.
5.1 In-house resolution (required first step under FCPA)
- Email the lender’s Consumer Assistance Unit (find address in app or SEC filings).
- They must acknowledge within 2 business days and fully answer within 15 bd.
- If unsatisfied or no answer, escalate.
5.2 Regulatory escalation
| Regulator | When to file | How to file | Typical outcome |
|---|---|---|---|
| Securities and Exchange Commission (SEC) – Enforcement and Investor Protection Department (EIPD) | Lender is a lending or financing company (look up in SEC list). | E-mail complaint form and evidence to complaints@sec.gov.ph OR walk-in (Picadilly Star, Taguig). | Written decision; may order refund, fines up to ₱ 1 M + ₱ 10 k/day, suspension/revocation, app takedown. |
| Bangko Sentral ng Pilipinas (BSP) – Consumer Assistance Mechanism | Lender is a BSP-supervised FI (bank, EMI, pawnshop, BNPL platform with EMI licence). | File via Consumeraffairs@bsp.gov.ph, hotline (02) 5306-2584, or Consumer Complaint Form on bsp.gov.ph. | Mediation; directive to refund; administrative fines up to ₱ 2 M/violation or 0.1 % of assets. |
| National Privacy Commission (NPC) | Collection harassment using your contact list, selfie, GPS, etc. | Online at privacy.gov.ph / complaints. | Cease-and-desist, fines up to ₱ 5 M, criminal referral. |
| Department of Trade & Industry (DTI) – Fair Trade Enforcement Bureau | Hidden fees, deceptive ads, unconscionable sales acts. | File at any DTI provincial office or e-mail FTEB. | Mediation → adjudication; fines up to ₱ 300 k + closure. |
Time limits:
- FCPA gives regulators 10 days to accept or dismiss a complaint, and 90 days to decide after acceptance.
- NPC resolves within 35–70 days (depending on fact finding).
5.3 Criminal & civil courts
- Barangay conciliation (for sums ≤ ₱ 400 k and parties in same LGU).
- Small Claims (A.M. 08-8-7-SC as amended 2022): ≤ ₱ 1 million principal; filing fee is a few hundred pesos; no lawyer needed. Sue for refund of over-charges.
- Regular civil action for larger claims or damages.
- Criminal complaint for cyber-libel, grave threats, unjust vexation, or Access Devices RA 8484 violations—file with NBI-Cybercrime Division or PNP-ACG, then prosecutor.
6. Remedies & sanctions available
| Forum | Possible lender penalties | Borrower relief |
|---|---|---|
| SEC (administrative) | Fine ≤ ₱ 1 M + ₱ 10 k/day, licence suspension/revocation, blacklisting from app stores, disgorgement, officers’ disqualification. | Refund of illegal fees/interest, contract reformation/nullification. |
| BSP | Fine ≤ ₱ 2 M per violation or 0.1 % assets, restitution, compliance order, MRO licence revocation. | Same + moral damages in mediation. |
| NPC | Fine ≤ ₱ 5 M, imprisonment (if egregious). | Deletion of unlawfully collected data, indemnification. |
| Civil courts | Judgment interest (currently 6 % p.a.), moral, exemplary, attorney’s fees. | Full restitution, damages, injunction. |
| Criminal courts | Imprisonment up to 12 years (cyber-libel), up to 6 years (Data Privacy), etc. | Restitution via civil action ex delicto. |
7. Notable jurisprudence and policy milestones
| Year | Case / Policy | Take-away |
|---|---|---|
| 2003 | Spouses Abella v. Spouses Cruz, G.R. 150172 | 7 % per month interest voided as unconscionable. |
| 2009 | Macalinao v. BPI Family, G.R. 184692 | 5 % per month penalty on credit cards struck down; courts may re-compute. |
| 2019 | SEC MC 18 | First direct regulation of online lending apps; > 60 apps ordered delisted in 2020-21. |
| 2021 | MB Res. 419/1729 | Statutory interest cap (6 %/mo) for salary-loan & BNPL. |
| 2022 | RA 11765 & BSP Circ. 1133 | Consolidated consumer-protection regime; mandatory internal dispute resolution before regulators. |
| 2024-2025 | SEC blacklists FlashPera, PesoGuarantor, 17 others | Pattern: hidden “service fees” of 30 %, public shaming; licences revoked. |
8. Frequently asked questions
Can I withhold payment until my complaint is resolved? Risky. Non-payment can trigger default interest and negative credit scoring. Safer to pay undisputed principal while disputing excess charges.
How long does an SEC case take? If uncontested facts (e.g., screenshots), summary order in 30-45 days. Contested cases with hearings can take 6 months+.
Will filing a complaint hurt my credit score? No. Credit bureaus (CIBI, TransUnion, CRIF) cannot downgrade merely for asserting statutory rights (FCPA §22).
Are interest caps absolute? Caps apply to loans ≤ ₱ 10 k with terms ≤ 4 months. For larger loans, courts still void rates that “shock the conscience.”
What if the app is unlicensed? File with SEC anyway. Operating without licence is a criminal offense (RA 9474 §12); SEC often collaborates with NBI to shut apps and freeze bank accounts.
9. Practical tips before borrowing
- Check the SEC’s “List of Registered Online Lending Platforms” (updated monthly).
- Calculate the Effective Interest Rate (EIR) using the Bangko Sentral’s online EIR calculator.
- Keep digital copies of every screen before clicking “Accept”.
- Never grant contact list permission; the loan must remain available even if you refuse (SEC MC 18 §5).
- Favor peer-to-peer platforms regulated as Electronic Money Issuers—they must segregate client funds in BSP-monitored accounts.
- Read the in-app complaint procedure; a lender’s refusal to post one is itself a violation.
10. Conclusion
Philippine law has evolved rapidly since 2019 to tame abusive online lending. The combination of interest caps, mandatory disclosures, data-privacy protections, and a multi-agency complaint system gives borrowers real leverage. Document every interaction, insist on in-house resolution first, then escalate—starting with the SEC for most apps or the BSP for bank-affiliated platforms. Courts remain the final backstop, ready to strike down unconscionable charges and award damages. Assert your rights early, and you can stop excessive costs before they snowball.
This guide is general information, not legal advice. When in doubt, consult a lawyer or the relevant regulator directly.