1) The Philippine concept of “usurious” vs. “excessive” interest

A. “Usury” in the classic sense

Historically, Philippine law had statutory interest ceilings under the Usury Law (Act No. 2655, as amended). Over time, however, the monetary authorities suspended the enforcement of those ceilings for most loans. In practice today, the more common legal battleground is not “usury” as a fixed numerical cap, but whether the interest rate and related charges are unconscionable, iniquitous, or shocking to the conscience—and therefore reducible or void under general civil law principles and Supreme Court jurisprudence.

B. “Excessive interest” (the modern, practical issue)

Even without a universal statutory cap, Philippine courts can intervene when interest, penalties, and charges are oppressive or grossly disproportionate. The legal system treats contracts as generally binding, but not when the terms violate law, morals, good customs, public order, or public policy, or when they become instruments of unjust enrichment.

Key takeaway: Complaints usually succeed not by citing a single “legal maximum,” but by proving the total pricing is unconscionable and/or that disclosures and consumer-protection rules were violated.

2) The core legal framework you will encounter

A. Civil Code principles (contract and equitable control)

Courts frequently rely on these ideas:

Freedom of contract exists, but is limited by law, morals, good customs, public order, and public policy.
Unconscionable interest may be reduced to a reasonable level or stricken, depending on the circumstances.
Penalty clauses and liquidated damages may be equitably reduced if iniquitous or unconscionable.
Interest on interest, “service fees,” “processing fees,” and similar add-ons may be scrutinized, especially when used to disguise pricing.

B. Truth in Lending Act (R.A. No. 3765)

This is central for consumer loans. It focuses on mandatory disclosures—so borrowers can understand the true cost of credit. A lender may be exposed to liability when it fails to properly disclose (among others):

Finance charges
Effective interest rate (or equivalent measures)
Fees and add-ons that function as credit pricing A common complaint theory is: even if a rate is not per se illegal, the lender misrepresented or failed to disclose the real cost, or structured charges to evade clear disclosure.

C. Bangko Sentral ng Pilipinas (BSP) rules (for banks and BSP-supervised institutions)

For banks, quasi-banks, and many BSP-supervised financial institutions, BSP consumer protection frameworks and fair treatment standards may apply, including:

Proper disclosure of pricing and terms
Fair collection practices
Handling of consumer complaints through internal mechanisms and BSP escalation BSP is often the correct regulator for bank-issued loans/credit cards and many supervised lenders.

D. SEC regulation (for lending companies, financing companies, and many online lending platforms)

If the lender is a lending company or financing company, the Securities and Exchange Commission (SEC) is typically the primary regulator (registration/licensing, compliance, and enforcement). Many online lending apps operate through entities that fall under SEC oversight.

SEC-related complaint theories frequently include:

The lender is unregistered or operating beyond its authority
Unfair or abusive collection practices
Misleading advertisements (e.g., “low interest” but huge fees)
Non-disclosure or deceptive disclosure of effective pricing

E. Other regulators depending on the lender

Cooperatives: Cooperative Development Authority (CDA) oversight (plus internal cooperative grievance processes).
Pawnshops: Generally regulated under BSP frameworks for pawnshops (and relevant laws/issuances).
Microfinance NGOs / informal lenders: May fall into mixed regimes; complaints may be directed to local authorities and courts, and to regulators if they are actually operating as covered entities.

F. Data Privacy Act (R.A. No. 10173) and harassment-related laws (often paired with “excessive interest” cases)

In many high-interest consumer lending scenarios—especially app-based lending—borrowers complain not only about pricing but also about:

Accessing contacts/photos without valid consent
“Shaming” tactics (messaging employers, friends, family)
Public posts, threats, or coercion

These may support separate complaints under:

Data Privacy Act (complaints to the National Privacy Commission)
Revised Penal Code offenses (threats, grave coercion, unjust vexation, libel/slander depending on facts)
Cybercrime Prevention Act (if committed through ICT, in some cases)
Civil claims for damages

3) What counts as “excessive” or “unconscionable” in practice

There is no single universal statutory ceiling that automatically makes an interest rate illegal across all private loans today. Instead, decision-makers look at the totality:

A. Pricing indicators that trigger scrutiny

Extremely high stated monthly interest (especially when annualized)
Very high penalty interest on late payment (e.g., daily compounding penalties)
“Service fees,” “processing fees,” “membership fees,” “collection fees,” or “insurance” that effectively function as additional interest
Short-term loans where fees are deducted upfront (making the effective rate much higher than the nominal rate)
Compounding structures that balloon rapidly
Total charges that become grossly disproportionate to the principal

B. Conduct indicators that strengthen a complaint

Failure to provide a clear disclosure statement (or burying key pricing)
Misleading marketing (“0% interest” but heavy fees)
Unilateral changes to pricing or terms without proper basis
Harassment, threats, shaming, or privacy violations during collection

C. Courts’ typical remedy posture

When courts find unconscionability, common outcomes include:

Reducing the interest rate to a more reasonable figure
Striking penalty clauses or reducing penalties
Treating certain “fees” as part of finance charge or disallowing them
Ordering recalculation of the obligation and refund/credit of overpayments (depending on posture and proof)

4) Identify the lender first: where you complain depends on who lent the money

Before filing, determine what the lender legally is:

A. Bank, credit card issuer, or BSP-supervised institution

Primary venue: the lender’s internal complaints unit first, then BSP escalation if unresolved. Clues:

Bank name, bank-issued credit card
Official bank branches
Listed as a bank/financial institution under BSP supervision

B. Lending company or financing company (including many online lending apps)

Primary venue: SEC (plus possibly NPC for privacy issues). Clues:

Loan app or website names that are not banks
“Lending company” / “Financing company” in documents
SEC registration numbers (or lack thereof)

C. Cooperative loan

Primary venue: Cooperative’s internal mechanisms, then CDA. Clues:

Membership shares, cooperative membership ID
Cooperative by-laws referenced

D. Pawnshop loan (sangla)

Primary venue: Pawnshop’s internal complaint channels, then often BSP-related consumer channels or other applicable regulators depending on structure; also court remedies if necessary. Clues:

Pawn tickets, collateral-based, redemption periods

E. Informal lender (individual “5-6,” unregistered groups)

Primary venues:

Civil action (collection/defense; annulment/reformation; damages; recovery of overpayment)
Criminal complaint if threats/coercion/harassment exist
Local mediation (barangay) may apply depending on parties and location
NPC complaint if privacy violations occurred via digital means

5) Choosing the type of complaint: administrative, civil, criminal (or all three)

A. Administrative complaints (regulator-driven)

Best when:

Lender is a regulated entity (bank, lending company, financing company, cooperative, pawnshop)
You want enforcement action, compliance orders, penalties, or license-related consequences
You want a structured complaint process without immediately filing a court case

Typical outcomes:

Orders to respond/mediate
Corrective compliance requirements
Sanctions for unfair practices (depending on proof and jurisdiction)

B. Civil remedies (court-driven)

Best when:

You need a binding recalculation of debt
You want refunds/credits of overpayments
You need damages for abusive conduct
You are being sued for collection and must raise defenses/counterclaims

Civil routes include:

Defending a collection case by challenging unconscionable interest/penalties
Affirmative case to declare interest/penalty void or reduce it; recover excess; claim damages
Small Claims (where applicable) for certain money claims (note: procedures and caps can change; check the current rules when filing)

C. Criminal complaints (conduct-driven)

Best when:

Threats, coercion, extortion-like behavior, defamatory shaming, doxxing
Fraudulent schemes or identity misuse
Privacy violations (which may be administrative/criminal under privacy law depending on facts)

Often paired with:

National Privacy Commission complaint for unlawful processing, disclosure, or misuse of personal data

6) Step-by-step: how to build and file a strong complaint about excessive interest

Step 1: Assemble documents (this is where most cases are won or lost)

Collect:

Promissory note/loan agreement
Disclosure statements (Truth in Lending forms, schedules)
App screenshots of pricing, repayment schedule, and deductions
Proof of disbursement (bank transfer, e-wallet receipts)
Proof of payments (receipts, transaction logs)
Collection messages, call logs, emails, social media posts
Any threats or “shaming” evidence
Any permission prompts from apps (contacts/media access), and evidence of misuse

Tip: Save originals and create a timeline index: Date borrowed → Amount received → Fees deducted → Due dates → Payments → Collection events.

Step 2: Compute the “real” cost of credit (effective pricing)

Regulators and courts respond better when you quantify.

Common situations:

Upfront deduction: “Loan is ₱10,000 but you received ₱8,500 after fees.” Your effective rate is computed on ₱8,500 received, not on ₱10,000 face value.
Short tenor: Two-week and one-month loans can have deceptively high annualized equivalents.
Fees disguised as non-interest: Processing/service/technology fees function as finance charges if they are required to obtain the loan.

A simple presentation format:

Face amount (contract principal): ₱____
Net amount received: ₱____
Total amount demanded for repayment: ₱____
Tenor: ____ days/weeks/months
Total finance charge (repayment minus net received): ₱____ Then explain: “The lender advertised/stated % but the effective charge is ₱_ over ____ days.”

Step 3: Send a written dispute / demand (even if you will file anyway)

A clear letter helps show good faith and frames issues:

Request full statement of account
Dispute unconscionable interest/penalties and fee characterization
Invoke disclosure failures (if any)
Demand recalculation and cessation of abusive collection
Preserve rights and warn of regulatory and privacy complaints

Step 4: File with the correct regulator (if applicable)

A. If BSP-regulated (banks, many supervised entities)

File through the institution’s internal complaints channel first (keep reference numbers)
Escalate to BSP consumer assistance mechanisms with:
- Contract and disclosures
- Computation summary
- Proof of internal complaint and lack of resolution
- Harassment evidence if any

B. If SEC-regulated (lending/financing companies, many loan apps)

File a complaint with the SEC that includes:
- Lender identity and proof of operations
- Contract, disclosures, marketing screenshots
- Effective rate computation
- Unfair collection evidence
- Request for investigation/sanctions and corrective relief

C. If cooperative (CDA)

Use cooperative grievance channels (minutes/resolutions if possible)
Escalate to CDA with supporting documents and computations

D. If privacy violations occurred (NPC)

File a complaint highlighting:

What personal data was accessed (contacts, photos, employer info)
Lack of valid consent or excessive permissions
Unauthorized disclosure (who was contacted, what was said, when)
Screenshots, chat logs, call logs, affidavits of contacted persons if available

Step 5: Consider parallel civil action (or prepare defenses if sued)

Scenarios:

You are being sued: raise unconscionable interest and equitable reduction of penalties as defenses; counterclaim for damages if warranted.
You want recalculation/refund: file civil case seeking declaration/reduction of interest and penalties; recovery of overpayment; damages for abusive collection/privacy breaches.

7) Common complaint angles and how to present them

Angle 1: Unconscionable interest and penalties

How to present:

Show the total charges relative to amount actually received
Emphasize short tenor + big finance charge
Compare penalty structure to principal (ballooning effect)
Highlight compounding and stacking (interest + penalty + fee + collection charge)

Angle 2: Disguised interest via fees

How to present:

Identify required fees deducted upfront or charged mandatorily
Explain they function as finance charges because the borrower cannot obtain the loan without them
Show mismatch between advertised “interest” and real finance charge

Angle 3: Truth in Lending disclosure violations

How to present:

Identify missing/unclear disclosures
Attach screenshots/documents where key terms are absent or misleading
Explain reliance: borrower proceeded without understanding true cost

Angle 4: Unfair debt collection practices and harassment

How to present:

Provide a chronological log of collection calls/messages
Attach threats, defamatory statements, employer/family contact evidence
Emphasize emotional distress, reputational harm, workplace consequences

Angle 5: Data privacy violations (especially with online lending)

How to present:

Show app permissions and what data was accessed
Show dissemination to third parties
Include statements/affidavits from contacted persons when possible
Argue lack of necessity/proportionality and invalid consent

8) Practical evidence tips (what adjudicators find persuasive)

Net proceeds proof (what you actually received) is crucial.
A one-page computation table is powerful:
- dates, amounts received, amounts paid, claimed balance, disputed charges
Screenshots with timestamps (include the URL/app name visible).
Affidavits from third parties contacted by collectors (employer HR, friends, family).
Preserve metadata: do not edit screenshots; export chats where possible.
Record calls only if lawful and done with caution; when in doubt, document call logs and contemporaneous notes.

9) Typical pitfalls

Complaining to the wrong agency (e.g., SEC vs BSP) or without identifying the lender type.
Focusing only on a stated rate instead of the effective cost including fees.
No proof of internal complaint (for BSP-supervised escalation paths).
Relying on verbal promises without documentation.
Paying under pressure without reserving rights (still possible to contest, but document “paid under protest” where feasible).
Ignoring privacy/harassment claims that can strengthen the case materially.

10) How outcomes usually look

Administrative (BSP/SEC/CDA/NPC)

Possible outcomes include:

Directing the lender to explain and produce records
Requiring corrective disclosures or stopping unfair practices
Penalties/sanctions for regulated entities
Orders or findings supporting your civil case

Civil (courts)

Common relief:

Reduction or nullification of unconscionable interest/penalties
Recomputed statement of account
Refund/credit of excessive charges (fact-dependent)
Damages for abusive conduct, if proven
Attorney’s fees in appropriate cases

Criminal / privacy track

Outcomes can include:

NPC enforcement actions and directives
Criminal prosecution for coercion/threats/defamation (fact-dependent)
Protective leverage against abusive collectors

11) A concise filing blueprint (what your complaint packet should contain)

Cover page / narrative
- Who you are, who the lender is, loan date, principal, net proceeds, tenor
Issues
- Unconscionable interest/penalties
- Disguised fees
- Disclosure failures
- Abusive collection
- Privacy violations (if any)
Requested relief
- Investigation; recalculation; cessation of abusive acts; sanctions; deletion/cessation of unlawful data processing; etc.
Annexes
- Contract + disclosures
- Proof of net proceeds
- Payment proofs
- Computation table
- Screenshots/messages/call logs
- Affidavits of third parties (if applicable)
- Proof of prior complaint to lender (if applicable)

12) Special notes for online/app lending (high-frequency complaint category)

Online lending complaints often combine:

Excessive effective rates due to short tenor + hefty fees
Misleading “interest” labels versus actual finance charge
Contact-harvesting and shaming-based collection

A strong approach is a dual-track filing:

SEC for lending/financing compliance, abusive collection, deceptive pricing
NPC for personal data misuse and third-party disclosures Then keep a civil option ready if the lender continues to claim inflated balances or threatens suit.

13) Bottom line principles that guide decision-makers

The absence of a universal interest ceiling does not give lenders a free pass: unconscionable pricing and penalties remain legally vulnerable.
Courts and regulators look hard at effective cost, disclosure quality, and collection conduct.
The best complaints are document-heavy, computation-driven, and timeline-organized, and they are filed with the correct regulator (or court) for the lender’s category.