Harassment After Paying an Online Loan: How to Demand Cessation and File Complaints

Introduction

In the Philippines, the rise of online lending platforms has provided convenient access to credit but has also led to widespread reports of harassment by lenders or their agents even after full repayment of loans. Such harassment often includes incessant calls, threatening messages, public shaming on social media, or unauthorized disclosure of personal information. This practice violates multiple Philippine laws designed to protect borrowers' rights, privacy, and dignity. This article comprehensively explores the legal framework surrounding post-payment harassment in online loans, the prohibitions against it, steps to demand its cessation, and procedures for filing complaints with relevant authorities. It draws on key statutes such as the Lending Company Regulation Act of 2007 (Republic Act No. 9474), the Data Privacy Act of 2012 (Republic Act No. 10173), the Cybercrime Prevention Act of 2012 (Republic Act No. 10175), and regulations from the Securities and Exchange Commission (SEC) and Bangko Sentral ng Pilipinas (BSP).

Understanding these elements is crucial for borrowers to assert their rights effectively. Harassment not only causes emotional distress but can also constitute criminal offenses, entitling victims to remedies including damages, injunctions, and penalties against the perpetrators.

Legal Framework and Prohibitions Against Harassment

Regulatory Oversight of Online Lending

Online lending companies in the Philippines must be registered with the SEC under Republic Act No. 9474, which governs lending companies, or with the BSP if they operate as banks or non-bank financial institutions. Unregistered or "fly-by-night" lenders are illegal and subject to penalties. The SEC Memorandum Circular No. 19, Series of 2019, specifically addresses fair debt collection practices for financing and lending companies, prohibiting harassment, abuse, or unfair collection methods.

Key prohibitions include:

• Harassment and Intimidation: Lenders cannot use threats, obscene language, or excessive contact. This is echoed in the Civil Code (Articles 19-21), which mandates good faith and prohibits abuse of rights.
• Data Privacy Violations: Under Republic Act No. 10173, personal data collected during loan applications (e.g., contact details, photos) cannot be processed or disclosed without consent. Post-payment, continued use of this data for harassment is unauthorized processing, punishable by fines and imprisonment.
• Cybercrimes: Republic Act No. 10175 criminalizes cyber libel (defamatory online posts), computer-related fraud, and identity theft if lenders misuse borrower information online.
• Consumer Protection: The Consumer Act of the Philippines (Republic Act No. 7394) protects against deceptive practices, while the Magna Carta for Philippine Internet Freedom (though not enacted, its principles influence jurisprudence) supports anti-harassment stances.

Even after repayment, lenders have no legal basis to continue contacting borrowers aggressively. Full payment extinguishes the obligation under the Civil Code (Article 1231), rendering further demands unlawful.

Common Forms of Harassment

Harassment may manifest as:

• Repeated calls or texts at unreasonable hours.
• Threats of legal action, arrest, or harm.
• Posting borrower details on social media ("name and shame").
• Contacting family, friends, or employers.
• Using fake accounts or bots for automated harassment.

These actions can lead to civil liability for moral damages (Civil Code, Article 2217) and criminal charges.

Steps to Demand Cessation of Harassment

Step 1: Document the Harassment

Before demanding cessation, gather evidence:

• Screenshots of messages, call logs, or social media posts.
• Records of loan agreement, payment receipts, and confirmation of full settlement.
• Witness statements if third parties were contacted.

This documentation is essential for any subsequent complaint or lawsuit.

Step 2: Send a Cease and Desist Demand

A formal demand letter is the first line of defense. It notifies the lender of the violation and demands immediate stoppage. While not mandatory, it demonstrates good faith and can be used in court.

How to Draft and Send a Cease and Desist Letter:

• Format: Use a professional letter format with your details, date, and the lender's address (from their app or website).
• Content:
  • State the facts: Loan details, payment completion date, and description of harassment.
  • Cite laws violated (e.g., RA 10173, RA 10175, SEC MC 19-2019).
  • Demand immediate cessation of all contact and deletion of personal data.
  • Warn of legal action if not complied with, including complaints to SEC, NPC, or courts.
  • Set a deadline (e.g., 7-10 days).
• Delivery: Send via registered mail, email, or through the lender's app. Retain proof of sending.

If the lender complies, monitor for recurrence. If not, proceed to formal complaints.

Additional Self-Protection Measures

• Block numbers and report spam via phone providers.
• Adjust privacy settings on social media.
• Seek a temporary restraining order (TRO) from courts if threats escalate.

Filing Complaints: Procedures and Authorities

Administrative Complaints

1. Securities and Exchange Commission (SEC)

• Jurisdiction: For registered lending companies violating fair collection rules.
• Procedure:
  • File online via SEC's eSPARC portal or in person at SEC offices.
  • Submit a sworn complaint affidavit with evidence.
  • No filing fee for consumer complaints.
  • SEC can impose fines (up to PHP 1 million), suspend operations, or revoke registration.
• Timeline: Investigations typically take 30-60 days; appeals possible.

2. National Privacy Commission (NPC)

• Jurisdiction: For data privacy breaches, such as unauthorized disclosure.
• Procedure:
  • File via NPC's online portal (privacy.gov.ph) or email.
  • Use the Privacy Complaint Form, attaching evidence.
  • No fee; NPC mediates or investigates.
  • Penalties: Fines (PHP 100,000 to 5 million) and imprisonment (1-6 years).
• Timeline: Preliminary assessment within 15 days; full resolution varies.

3. Bangko Sentral ng Pilipinas (BSP)

• Jurisdiction: If the lender is BSP-regulated (e.g., banks).
• Procedure: File through BSP's Consumer Assistance portal or hotline (02-8708-7087). Provide details and evidence; BSP can sanction entities.

Criminal Complaints

1. Philippine National Police (PNP) or National Bureau of Investigation (NBI)

• Jurisdiction: For cybercrimes under RA 10175.
• Procedure:
  • Report to the nearest PNP Anti-Cybercrime Group (ACG) or NBI Cybercrime Division.
  • File a blotter or affidavit; provide evidence.
  • If warranted, they endorse to the prosecutor's office for inquest.
  • Penalties: Imprisonment (6 months to 6 years) and fines.

2. Department of Justice (DOJ)

• Jurisdiction: Prosecutorial review for cybercrimes.
• Procedure: After PNP/NBI endorsement, attend preliminary investigation. If probable cause found, case filed in court.

Civil Actions

• Small Claims Court: For damages up to PHP 400,000 (no lawyer needed).
• Regular Civil Court: For injunctions, damages, or specific performance (e.g., data deletion).
• Procedure:
  • File a complaint with the Municipal Trial Court (MTC) or Regional Trial Court (RTC), depending on amount.
  • Pay filing fees (waivable for indigents).
  • Seek moral/exemplary damages, attorney's fees.

Barangay Conciliation

For disputes under PHP 300,000, start with Barangay Justice System (Katarungang Pambarangay) for mediation. If unsuccessful, obtain a Certificate to File Action for court.

Remedies and Potential Outcomes

• Injunctive Relief: Courts can order cessation via TRO or permanent injunction.
• Damages: Moral (for suffering), actual (expenses), exemplary (punitive).
• Penalties Against Lenders: Fines, imprisonment, business closure.
• Class Actions: If multiple victims, collective suits possible.

Successful complaints have led to SEC revocations (e.g., cases against apps like Cashwagon) and NPC fines.

Challenges and Considerations

• Identifying Lenders: Foreign-based apps may complicate service of process; use SEC's list of registered entities.
• Prescription Periods: Civil actions (4-10 years), criminal (5-20 years depending on offense).
• Legal Aid: Free assistance from Public Attorney's Office (PAO) or Integrated Bar of the Philippines (IBP) for qualified individuals.
• Preventive Measures: Before borrowing, verify lender registration via SEC/BSP websites; read terms carefully.

By following these steps, borrowers can effectively halt harassment and hold lenders accountable, contributing to a fairer lending ecosystem in the Philippines.