The proliferation of online lending platforms (OLPs) has significantly expanded financial inclusion in the Philippines. However, this growth has been accompanied by a surge in "predatory lending" and fraudulent schemes. These often involve exorbitant interest rates, hidden charges, and—most notoriously—harassment or "debt shaming."
If you are a victim of a fraudulent or abusive lending company, the Philippine legal system provides specific administrative and criminal pathways for redress.
1. Regulatory Framework and Governing Bodies
In the Philippines, lending companies are primarily regulated by the Securities and Exchange Commission (SEC) under the Lending Company Regulation Act of 2007 (Republic Act No. 9474) and the Financing Company Act of 1998 (Republic Act No. 8556).
Depending on the nature of the violation, complaints should be directed to the following:
- Securities and Exchange Commission (SEC): For violations of disclosure requirements, lack of authority to operate, and unfair debt collection practices.
- National Privacy Commission (NPC): For unauthorized processing of personal data, such as accessing your contact list to harass your friends and family.
- Bangko Sentral ng Pilipinas (BSP): For entities that are banks or BSP-supervised financial institutions.
- National Bureau of Investigation (NBI) / PNP Anti-Cybercrime Group: For criminal acts such as cyber-libel, threats, and estafa.
2. Common Grounds for a Complaint
You have a cause of action if a lending company engages in any of the following:
Unfair Debt Collection Practices
Under SEC Memorandum Circular No. 18 (Series of 2019), lending companies are prohibited from:
- Using threat of force or other criminal means to harm the person, reputation, or property of any person.
- Using threats to take any action that cannot legally be taken.
- Contacting persons in the borrower’s contact list without consent.
- Disclosing or publishing the borrower's name and personal circumstances as a "delinquent" or "scammer."
Violation of Truth in Lending Act (R.A. No. 3765)
Lenders must provide a Disclosure Statement before the consummation of the loan. This must clearly state the cash price, down payment, finance charges (interest, service fees), and the total amount to be paid. Failure to provide this is a violation of law.
Data Privacy Violations
If an app accesses your gallery, contacts, or social media accounts to shame you, they are violating the Data Privacy Act of 2012 (R.A. No. 10173).
3. Step-by-Step Process for Filing a Complaint
Step 1: Document Everything
Evidence is the backbone of your case. Ensure you have the following:
- Screenshots: Of the loan agreement, disclosure statement, and the harassing messages/emails.
- Call Logs/Recordings: If the collectors are calling and using profane language.
- Proof of Payment: Receipts or transaction history.
- Company Details: The name of the app and the registered corporate name (often found in the "About" section or the SEC registry).
Step 2: Formal Complaint with the SEC
To file a complaint for violation of the Lending Company Regulation Act or Unfair Collection Practices:
- Visit the SEC Corporate Governance and Finance Department (CGFD) or use the SEC online complaint portal.
- Submit a Formal Complaint or a Verified Complaint if you intend to seek the revocation of their Certificate of Authority (CA).
- Include a "Certificate of Non-Forum Shopping" if filing a formal verified complaint.
Step 3: Complaint with the National Privacy Commission (NPC)
If the issue involves "debt shaming" or unauthorized contact of people in your phone book:
- File a complaint through the NPC’s Data Privacy Complaint Portal.
- Focus on "Unauthorized Processing" and "Malicious Disclosure" of personal information.
Step 4: Filing Criminal Charges (Cybercrime)
If the lender’s actions constitute Grave Threats, Extortion, or Cyber-Libel:
- Go to the NBI Cybercrime Division or the PNP Anti-Cybercrime Group (ACG).
- Provide your sworn statement and evidence. They can assist in tracking the digital footprint of the perpetrators.
4. Key Laws to Reference
When drafting your complaint, citing these laws strengthens your position:
| Law/Regulation | Focus Area |
|---|---|
| R.A. No. 9474 | Requirement for a License/Certificate of Authority to operate as a lender. |
| SEC M.C. No. 18 (2019) | Prohibitions against harassment and unfair collection. |
| R.A. No. 10173 | Protection of your personal data and contact lists. |
| R.A. No. 10175 | Cyber-libel and unauthorized access to computer data. |
| BSP Circular No. 1133 | Ceilings on interest rates and penalties for small loans. |
5. Defensive Measures and Remedies
- Cease and Desist: The SEC has the power to issue Cease and Desist Orders (CDO) against companies operating without a license.
- Revocation of License: If a registered company repeatedly violates fair collection standards, their license can be revoked.
- Interest Rate Caps: Under current BSP rules, interest rates for small-value, short-term loans are capped (e.g., 6% per month nominal interest, 15% total cost of credit per month). Anything significantly higher may be considered "unconscionable" and legally unenforceable under Philippine jurisprudence.
Note: Even if you owe a legitimate debt, the lender has no legal right to harass, shame, or threaten you. A debt is a civil obligation, while harassment and data privacy violations are criminal and administrative offenses.