I. Overview

In the Philippines, lending activities are tightly regulated because they directly affect ordinary consumers and the financial system. When lending companies engage in abusive collection practices, charge hidden or excessive fees, or operate without proper authority, borrowers have several legal remedies: administrative complaints before regulators, civil actions before courts, and, in some cases, criminal complaints.

This article explains, in Philippine context:

Which agencies regulate lending companies
What borrower rights are protected by law
When and where to file complaints
The basic steps and documents involved
Special issues for online lending apps

It is general information only and not a substitute for advice from a Philippine lawyer or public counsel (e.g., PAO).

II. Legal and Regulatory Framework

1. Main regulators

Securities and Exchange Commission (SEC)
- Regulates lending companies and financing companies under:
  - Lending Company Regulation Act of 2007 (Republic Act No. 9474)
  - Financing Company Act of 1998 (Republic Act No. 8556)
- Handles complaints against:
  - SEC-registered lending/financing companies
  - Many online lending apps (OLAs) that operate as lending/financing companies
Bangko Sentral ng Pilipinas (BSP)
- Regulates:
  - Banks (universal, commercial, thrift, rural, cooperative banks)
  - Non-bank financial institutions like e-money issuers and some credit providers
- Handles complaints involving:
  - Bank-issued credit cards
  - Bank loans (personal loans, salary loans, auto loans, housing loans)
  - Some digital lending platforms tied to banks or e-money issuers
Cooperative Development Authority (CDA)
- Regulates credit cooperatives and multi-purpose cooperatives that offer loans to members.
- Complaints involving loans from cooperatives often go through:
  - Internal cooperative grievance mechanisms
  - CDA for regulatory violations
  - Courts for civil disputes (e.g., validity of loan, foreclosure, etc.)
National Privacy Commission (NPC)
- Enforces the Data Privacy Act of 2012 (Republic Act No. 10173).
- Handles complaints on:
  - Unauthorized access/use of your personal data
  - Harassment through contacting your phone contacts
  - Posting your personal information or photos on social media to shame you
  - Over-collection of data by lending apps
Department of Trade and Industry (DTI)
- Enforces the Consumer Act of the Philippines (Republic Act No. 7394) and handles unfair or deceptive trade practices.
- Sometimes relevant where lending is tied to product purchases or where misrepresentation in marketing occurs.
Other possible authorities
- Philippine National Police (PNP)/National Bureau of Investigation (NBI) – for criminal acts, e.g. threats, extortion, estafa.
- Courts – for civil and criminal cases.
- Barangay (Lupong Tagapamayapa) – for barangay conciliation in certain civil disputes.

III. Common Grounds for Complaints

You may have a basis to complain if a lending company or app does any of the following:

Harassing or abusive collection practices
- Threatening to post your photos or personal details online
- Sending threatening or obscene messages
- Calling or texting you or your contacts repeatedly at unreasonable hours
- Using slurs, insults, or humiliating language
Unjustified disclosure and shaming
- Messaging your family, friends, employer, or contacts about your debt
- Posting on social media alleging you are a “scammer” or “criminal” because of unpaid loans
- Creating group chats to shame you
Lack of transparency on charges
- Failing to clearly disclose:
  - Interest rate (per month and per year)
  - Service charges, processing fees, penalties
- Misleading “0% interest” claims but hiding large “fees”
Unfair or unconscionable loan terms
- Extremely high effective rates and penalties that appear grossly one-sided
- Very short payment periods with disproportionate penalties
Unauthorized or fraudulent transactions
- Loan or credit issued in your name without your consent
- Unauthorized deductions from your bank or e-wallet
Operating without authority
- A “lending company” or app not registered with the SEC
- A person or group running a loan business without licenses (“5–6” operators)
Data privacy violations
- Collecting more data than needed for the loan
- Using your phonebook, photos, or files for harassment
- Failing to secure your data resulting in leaks or misuse

IV. Identify What Kind of Lender You’re Dealing With

Before filing a complaint, determine what entity you borrowed from. Jurisdiction matters.

Banks / Credit Card Issuers / E-Money Issuers
- Examples: commercial banks, digital banks, rural banks, issuers of credit cards or e-wallets that give credit.
- Regulator: BSP
Lending or Financing Companies (Non-Bank)
- Corporate entities whose primary business is lending to the public.
- Often called “Lending Investor, Inc.”, “Finance Corp.”, “Credit Corp.” etc.
- Regulator: SEC
Online Lending Apps
- Many are either:
  - SEC-registered lending/financing companies; or
  - POSIBLE: unregistered / illegally operating apps.
- Regulator: SEC (for corporate entity), NPC (for data/privacy issues), and possible criminal complaints for harassment.
Cooperatives
- Offer loans to members only.
- Regulator: CDA
- Internal dispute procedures usually exist in the coop by-laws.
Informal individual lenders (“loan sharks”, “5–6”)
- Individuals or informal groups, often unregistered.
- May fall under:
  - SEC (for engaging in lending business without authority), and
  - Criminal law (threats, coercion, estafa), and
  - Civil law (collection disputes, damages).

Correctly identifying the entity helps you choose the right government agency.

V. Legal Bases and Borrower Rights

Key laws that protect borrowers include:

Civil Code of the Philippines
- General rules on contracts: contracts must not be contrary to law, morals, good customs, public order, or public policy.
- Courts may reduce unconscionable interest and penalties and award damages for abusive conduct.
Truth in Lending Act (Republic Act No. 3765)
- Requires lenders to clearly disclose to borrowers:
  - Finance charges
  - Annual percentage rate (APR)
  - Other charges related to the loan
- Violations may result in penalties and can help support a complaint.
Lending Company Regulation Act (RA 9474) & Financing Company Act (RA 8556)
- Require lending and financing companies to:
  - Register with the SEC
  - Comply with capital requirements
  - Disclose loan terms properly
  - Follow regulatory rules on operations and collection
Securities Regulation Code (RA 8799)
- Grants powers to SEC to regulate and sanction entities under its jurisdiction, including lending/financing companies.
Data Privacy Act of 2012 (RA 10173)
- Protects personal information.
- Lenders must:
  - Collect only necessary data
  - Obtain valid consent
  - Secure personal data
  - Use it only for legitimate purposes
- Misuse such as harassment through your contacts or public shaming can form the basis of NPC complaints and criminal liability.
Financial Products and Services Consumer Protection Act (RA 11765)
- Strengthens protection for financial consumers of banks and other financial service providers.
- Gives BSP, SEC, Insurance Commission and others powers to:
  - Investigate complaints
  - Issue orders and sanctions
  - Enforce standards of fair treatment and transparency.
Relevant criminal laws (Revised Penal Code, etc.)
- Grave threats, grave coercion, unjust vexation – applicable to harassment and intimidation.
- Libel / Cyberlibel – for defamatory posts on social media.
- Estafa – in cases of deceit or fraud.
- Violations of RA 10173 – criminal penalties for certain privacy violations.

VI. Types of Remedies and Forums

1. Administrative complaints (Regulators)

Purpose: Punish/regulate the lending company (fines, suspension, revocation of license, cease-and-desist orders).
Who can you file with?
- SEC – for lending/financing companies and many OLAs
- BSP – for banks and certain non-bank financial institutions
- CDA – for cooperatives (regulatory side)
- NPC – for data privacy issues
- DTI – for deceptive trade practices in some cases

Note: Regulators often do not award full civil damages like a court. Their focus is regulatory enforcement and consumer protection.

2. Civil actions (Courts)

You may file a case in court for:

Annulment or reformation of the loan contract
Declaration of nullity of unconscionable interest and penalties
Damages for harassment, defamation, and emotional distress
Injunction to stop illegal acts (e.g., harassment, posting on social media)

For relatively small amounts, you may use Small Claims procedure (no lawyer required, up to a certain monetary limit set by the Supreme Court rules, which has been periodically increased by administrative circulars).

3. Criminal complaints

If the conduct of the lender or collector constitutes a crime (e.g., grave coercion, threats, libel, privacy violations), you may:

File a complaint with:
- PNP or NBI (for investigation)
- Office of the City/Provincial Prosecutor (for preliminary investigation)

Criminal complaints focus on penal liability, not just the debt.

4. Barangay conciliation (Katarungang Pambarangay)

For many civil disputes where the parties reside in the same city/municipality and the amount is within prescribed limits, the law requires you to first undergo barangay conciliation before filing a court case.

However, barangay conciliation generally does not apply where:

Government agencies are involved; or
The case is within the exclusive jurisdiction of a regulator; or
One party is a juridical entity under certain circumstances (with exceptions).

VII. How to File Complaints with Key Regulators

Important: Exact procedures, forms, and contact details change over time. Always check the latest instructions on the official website or directly with the agency before filing.

A. Complaint before the SEC (Lending/Financing Companies & Many OLAs)

Typical steps:

Prepare your complaint letter or affidavit
- Describe:
  - The loan (amount, date, terms)
  - The name of the company and, if applicable, the app name
  - Specific abusive acts (dates, samples of messages, calls, posts)
- State clearly what laws or rights you believe were violated (e.g., abusive collection, operating without license, lack of disclosure).
Attach supporting documents
- Government ID
- Loan agreement or screenshots of app terms
- Proof of payments (receipts, bank/wallet screenshots)
- Screenshots of abusive messages or calls
- Any proof the company is or claims to be SEC-registered (SEC documents, corporate name)
File with the SEC
- Through personal filing, mail, courier or electronic submission (depending on current SEC rules).
- You may need to use specific complaint forms if prescribed.
Investigation and possible outcomes
- SEC may:
  - Require the company to respond
  - Conduct hearings or conferences
  - Issue show-cause or cease-and-desist orders
  - Impose fines or suspend/revoke the company’s license
- SEC may publish lists of registered, suspended, or illegal lenders.

B. Complaint before the BSP (Banks and Regulated Entities)

Under current policy frameworks, BSP usually requires:

File first with the financial institution’s customer assistance
- Submit a written complaint to the bank, credit card issuer, or e-money issuer.
- Keep:
  - Reference numbers
  - Copies of your complaint and their replies.
Wait a reasonable period for resolution
- The bank is normally required to respond within a set period under BSP’s financial consumer protection rules.
Escalate to BSP if unresolved
- Prepare a complaint letter or form summarizing:
  - The loan/credit facility
  - Steps you took with the bank
  - Why you are dissatisfied with the resolution
- Attach:
  - IDs
  - Contract and statements
  - Correspondence with the bank
  - Screenshots or recordings of abusive conduct
BSP’s role
- BSP may:
  - Mediate between you and the bank
  - Direct the institution to correct violations
  - Impose sanctions for non-compliance with regulations

C. Complaint before the NPC (Data Privacy Violations)

This is crucial for online lending app harassment.

Typical flow:

Write a letter or email first to the company (data controller)
- State:
  - You are asserting your rights under the Data Privacy Act
  - Describe the privacy violation (e.g., contacting your contacts, posting your data)
  - Request specific relief (stop processing, delete data, stop contacting contacts, etc.)
Give the company a chance to respond
- NPC rules generally require you to first try to resolve with the company, subject to some exceptions (e.g. urgent and serious threats).
File a formal complaint with NPC
- Include:
  - Complaint form or letter
  - Your letter to the company and their reply (or lack of reply)
  - Screenshots, links to posts, messages sent to your contacts, etc.
Possible outcomes
- NPC may:
  - Order the company to stop unlawful processing
  - Order data deletion or restriction
  - Impose administrative fines and other sanctions
  - Recommend criminal prosecution for serious violations

D. Complaints involving Cooperatives – CDA and Internal Mechanisms

Check the by-laws of your cooperative for internal grievance or mediation processes.
If there is violation of cooperative laws or regulations, you may raise it with CDA, aside from regular court remedies.

VIII. Evidence: What You Should Gather

To strengthen your complaint:

Identity and loan documents
- Valid government ID
- Loan agreement / promissory note
- Disclosure statement on loan/credit
- Screenshots of app terms and conditions
Payment proof
- Official receipts
- Bank or e-wallet transaction history
- Deposit slips
Collection and harassment evidence
- Screenshots of SMS, chat messages, social media posts
- Call logs or recordings (subject to rules on recording conversations)
- Messages sent to your contacts or group chats created for shaming
Privacy-related evidence
- Proof that the app accessed your contacts or photos
- Complaints from friends/family contacted by the lender
Chronology of events
- Timeline summarizing when you borrowed, when problems started, and all key events.

IX. Special Issues with Online Lending Apps

Access to phone data
- Many OLAs request access to:
  - Contacts
  - Photos and files
  - Camera and microphone
- Over-collection of data and its use for harassment can be a data privacy violation.
Short-term loans with high fees
- 7–14 day loans with significant “service fees” deducted upfront.
- The effective interest rate can become extremely high, and may be argued as unconscionable in court.
“Shaming” tactics
- Calling you a “scammer” in group chats, sending edited photos, or threatening your job.
- These actions may violate:
  - Data Privacy Act
  - Criminal laws on libel, threats, unjust vexation
  - Civil rights to privacy and reputation
Unregistered or banned apps
- Some OLAs are not licensed or have been ordered to stop operations.
- Complaints may be lodged with:
  - SEC (for illegal lending/business without authority)
  - Law enforcement (if criminal acts are involved)
Coordinated complaints
- If many borrowers are similarly victimized, regulators may see a pattern and act more decisively (e.g., cease-and-desist orders, public advisories).

X. Interest Rates, Penalties, and the “Usury Law”

No fixed usury ceiling, but courts can reduce unconscionable rates
- Although old usury ceilings are no longer strictly enforced, courts can still:
  - Declare unconscionable interest rates void or reduce them
  - Lower extremely high penalties and charges
Regulated interest for certain products
- For some financial products (like credit cards or specific small-value loans through regulated entities), BSP may set caps or standards.
What you can argue in complaints
- That interest and penalties are:
  - Disproportionate to the amount and term of the loan
  - Not clearly disclosed at the start
  - So one-sided as to be contrary to morals and public policy

XI. Practical Step-by-Step Guide for a Typical Borrower

Scenario: You borrowed from an online lending app and are now being harassed and shamed.

Secure your account and device
- Change passwords and limit app permissions.
- Revoke app access to contacts and files where possible.
Document everything
- Save copies of all messages, screenshots, posts, and proof of loan.
- Write down a timeline of events.
Formally complain to the lender/app
- Demand that:
  - Harassment and contact of your contacts stop immediately
  - They delete or stop using your personal and sensitive data for harassment
- Do it in writing (email, in-app message, registered mail if possible).
File appropriate regulatory complaints
- SEC – for illegal/abusive lending practices
- NPC – for privacy violations (contacting your contacts, posting your info)
- BSP – if a bank or e-wallet issuer is directly involved
- Law enforcement – if threats, extortion, or libel are involved
Consider civil and/or criminal actions
- If harm is serious (job loss, psychological distress, reputational damage), consider consulting a lawyer or PAO about:
  - Civil case for damages
  - Criminal case for threats, libel, or privacy violations
Do not ignore the debt
- Harassment is illegal, but valid debts do not disappear by themselves.
- You may:
  - Negotiate a reasonable payment plan
  - Challenge unreasonable interest and penalties through court if needed

XII. Frequently Asked Questions (FAQs)

1. Can a lending company send messages to my contacts about my debt? Generally, no. Using your contacts to pressure you into paying involves disclosure of your personal data to third parties without lawful basis and may violate the Data Privacy Act, and possibly civil and criminal laws on privacy and defamation.

2. Can they post my photo or ID on Facebook calling me a “scammer”? Such acts are likely illegal and may constitute:

Data privacy violation
Libel/cyberlibel
Unjust vexation, harassment, or related offenses

You can complain to NPC, SEC/BSP (as applicable), and law enforcement.

3. They say they will “file a case” or “issue a warrant of arrest” if I don’t pay within hours. Is this legal? Only courts can issue warrants of arrest after proper criminal proceedings. Threats of immediate arrest by collectors are usually false and abusive, and may constitute grave coercion or unjust vexation.

4. Do I still have to pay if the company is illegal or unregistered? The illegality of their business can be raised as a defense and basis for regulatory or criminal action, and may affect the enforceability of certain contractual terms. However, whether the principal obligation is still enforceable is a legal question that depends on facts and jurisprudence; you should consult a lawyer or PAO.

5. Can a lending company deduct my salary without my consent? Generally, no. Salary deductions require:

Your express, written, informed consent; and
Compliance with labor and civil law standards. Unauthorized deductions may be questioned before your employer, DOLE, and/or courts.

6. Do I need a lawyer to file a complaint with SEC, BSP, NPC, or regulators? Not usually. Most regulators accept complaints directly from consumers. However, for court cases and complex matters, consulting a lawyer is strongly advisable.

XIII. Practical Tips and Final Notes

Keep all records and communications with lenders and collectors.
Communicate in writing as much as possible.
Avoid emotional or threatening replies; respond factually and document everything.
Use official channels of regulators for complaints.
For serious or high-stakes disputes, or if you are being seriously harassed, consult:
- A private lawyer
- The Public Attorney’s Office (PAO), if you qualify
- Legal aid clinics of law schools or NGOs

Laws and regulations evolve, and agencies update their procedures. When you are ready to act, always verify the latest rules and forms from official government sources or with the help of counsel.