Harassment by Lending Companies Over Unpaid Loans in the Philippines: A Comprehensive Legal Treatment

Online and traditional lending in the Philippines has exploded since 2018, and so have complaints of “debt-shaming,” threats, and other abusive collection tactics. Regulators have responded with a layered regime that now spans sector-specific statutes, consumer-protection legislation, data-privacy rules, and criminal law. What follows is a practitioner-style overview of everything a borrower, lender, compliance officer, or litigator needs to know as of 15 May 2025.

1 Statutory Backbone

Law	Key Points on Harassment
Republic Act 9474 – Lending Company Regulation Act of 2007	Requires every lending company (LC) to secure a certificate of authority (CA) from the Securities and Exchange Commission (SEC); Sec. 12 punishes any unlicensed or abusive LC with ₱10 000–₱50 000 fine and 6 months–10 years’ imprisonment. (SEC Appointment)
Republic Act 8556 – Financing Company Act	Parallel framework for financing companies (FCs); SEC has identical supervisory powers and can suspend or revoke the CA for unfair practices. (Credit Information Corporation)
Republic Act 11765 – Financial Products & Services Consumer Protection Act (FPSCPA, 2022)	Codifies five consumer rights (equitable & fair treatment, disclosure & transparency, protection of assets, data privacy, redress) and grants the BSP, SEC, Insurance Commission (IC) & CDA adjudicatory power up to ₱10 million and the ability to issue cease-and-desist orders (CDOs) for abusive collection. (ACCRALAW)
Republic Act 10173 – Data Privacy Act (DPA, 2012)	Unauthorized disclosure of loan data or scraping of a borrower’s contact list is punishable by up to 6 years’ imprisonment plus fines up to ₱4 million.
Other cross-cutting laws	- Art. 282, 287 Revised Penal Code (grave threats/coercion)

RA 10175 (Cybercrime Prevention Act) for online libel & cyberstalking
RA 9995 (Anti-Photo and Video Voyeurism) if collectors use intimate images
RA 11934 (SIM Card Registration Act, 2022) enables tracing of collectors who hide behind prepaid numbers. |

2 Key Regulatory Issuances

2.1 SEC Memorandum Circular 18-2019

The watershed rule against “unfair debt-collection practices” applies to all LCs and FCs. Acts explicitly banned include: violence or threats, obscene language, false legal claims, disclosure of personal data, contacting anyone in a borrower’s phonebook who is not a guarantor/co-maker, and calls before 6 a.m. or after 10 p.m. unless the account is over 15 days past due. (Moneymax) Penalties: ₱25 000/₱50 000 (first offense, LC/FC) → up to ₱1 million + 60-day suspension or CA revocation (third offense). (Moneymax)

2.2 SEC Memorandum Circular 19-2019 and MC 10-2021

MC 19 requires every online lending platform (OLP) to be reported 10 days before launch; MC 10 declared a moratorium on new OLPs after a surge in harassment complaints. (Moneymax)

2.3 Bangko Sentral ng Pilipinas (BSP) Rules

Manual of Regulations for Banks, §312 (former Circular 454/2004 & C-1003), bars banks and their collection agents from “harassing, abusing or oppressing any cardholder” and mirrors the SEC list of prohibited acts. (Bureau of the Treasury) Under BSP Circular 1160-2022 and 1169-2023 (FPSCPA IRRs), every BSP-supervised institution (BSI) must operate a Financial Consumer Protection Assistance Mechanism (FCPAM) and entertain complaints before the borrower escalates to BSP-CAM or adjudication.

2.4 NPC Circular 20-01 (amended 2023)

Forbids an app from accessing a phone’s contact list for collection purposes and requires purpose-specific consent; violations trigger criminal liability under the DPA.

3 What Counts as Harassment?

Below is the consolidated “black list” drawn from SEC MC 18, BSP credit-card rules, and NPC guidance: (Moneymax, Bureau of the Treasury)

Threats of violence, arrest, or criminal prosecution
Use of obscene or profane language
False legal, police, or credit-bureau representations
Public or third-party disclosure of the debt (including mass-text or social-media posts)
Contacting anyone in the borrower’s phonebook except guarantors/co-makers
False or deceptive documents (e.g., fake court summons)
Calls or messages before 6 a.m. or after 10 p.m. (bank rules use 8 a.m.–9 p.m.)
Collecting fees or interests not in the contract or beyond regulatory caps
Using the borrower’s photo or intimate images to shame or threaten payment

4 Enforcement & Recent Jurisprudence

SEC CDOs & Revocations – 84 CDOs issued 2019-2024; 19 OLPs shut down in September 2024 alone, and six more halted on 26 June 2024 for MC 18 breaches. (RESPICIO & CO.)
KingABC Lending Corp. (2021) lost its CA after 15 MC 18 violations, including Facebook “scammer” posts.
Super Cash (2020) – CA revoked for nine MC 18 violations: threats of estafa, NBI blacklisting, and social-media shaming.
Populus/PesoPop (NPC Decision 26 Sep 2023) – directors recommended for criminal prosecution under Sec. 25 DPA for unauthorized disclosure of contacts.
JVA v. Uxxx Lending Corp. (NPC Case 19-498, 2020) – NPC held that blanket “contact-list consent” was invalid; disclosure of the debt to friends constituted unlawful processing.
Makati Collector Raid – 35 collectors arrested in 2023 for text threats and doctored memes. (Moneymax)

5 Borrower Remedies & Procedure

Channel	Who Regulates	How to Complain	Typical Relief
SEC – CGFD	LCs/FCs, OLPs	Download complaint form, attach screenshots/call-logs, valid ID; email or walk-in	Fines, CDO, CA suspension/revocation, referral for criminal charges. (Credit Information Corporation, Moneymax)
BSP – CAM/Adjudication	Banks, credit-card issuers, e-money & BNPL providers	First complain to BSI-FCPAM, then escalate via BOB chatbot or regional office	Mediation or adjudication award ≤ ₱10 million; directive to cease unfair practice.
National Privacy Commission	All entities processing personal data	Notarized complaint (Form NPC – CP), submit within 12 months; mediation mandatory	Cease-and-desist, deletion of data, damages up to ₱2 million per complainant, criminal referral. (Credit Information Corporation)
DOJ-Office of Cybercrime / PNP-ACG / NBI-CCD	Criminal harassment, cyber-libel, grave threats	Affidavit, screenshots, witness statements	Arrest, prosecution under RPC or RA 10175.
Civil courts	Any lender	Suit for moral & exemplary damages under Arts. 19-21, 26 Civil Code	Monetary award; injunction against further threats.

6 Penalties Snapshot

SEC MC 18 – up to ₱1 million + 60-day suspension or CA revocation on 3rd offense. (Moneymax)
FPSCPA (RA 11765) – fines up to twice the amount gained or ₱2 million*, disgorgement, officer disqualification, CDOs. (ACCRALAW)
Data Privacy Act – 1-6 years’ imprisonment + ₱500 000-₱4 million for unauthorized processing/disclosure.
RA 9474 – unlicensed lending: ₱10 000-₱50 000 and 6 months-10 years’ jail; daily fines for continuing violations. (SEC Appointment)
Revised Penal Code / RA 10175 – grave threats: arresto mayor; cyber-libel: prision correccional + fines.

7 Defensive Playbook for Borrowers

Document Everything – keep voice recordings (with consent), screenshots, call logs, and abusive chat messages.
Demand Validation – under Art. 1159 Civil Code, ask for a statement of account and legal basis of fees.
Send a Cease-and-Desist Letter – put the collector on notice; refusal strengthens an SEC/NPC case.
File Administrative Complaints promptly; regulators prefer that you try the lender’s help-desk first.
Consider Restructuring – you remain liable for the principal; harassment does not extinguish the debt, but you can negotiate payment while the case is pending.

8 Compliance Checklist for Lending Companies & Collectors

Register as an LC/FC and secure both SEC CA and DTI/Mayor’s permits.
Vet third-party collection agencies; ultimate liability remains with the principal lender.
Adopt written Fair Collection Policy mirroring MC 18 & BSP rules.
Limit data collected to KYC essentials; ban scraping of contact lists.
Provide recording of calls on demand and maintain audit trails for 3 years.
Observe interest-rate caps (BSP Circular 1133-2021: 6 %/month interest + 10 %/month penalties for short-term loans). (Lexology)

9 Trends & Outlook (2024 – 2025)

Google & Apple continue to delist apps named in SEC CDOs within 48 hours.
SEC is finalising MC 05-2025, which will extend MC 18 standards to independent collection agencies and require quarterly call-log analytics submissions.
The BSP’s BOB chatbot now integrates with the National ID system for quicker identity verification and is seeing a 60 % rise in harassment-related tickets (BSP data, April 2025).

10 Takeaways

Harassment is no longer a grey area—it is expressly illegal, multi-regulated, and increasingly penalised. Borrowers have three administrative venues (SEC, BSP, NPC) before even going to court, while lenders face escalating fines, licence revocation, and potential jail time for officers. Rigorous compliance and respectful collection are now indispensable to staying in business in the Philippine lending space.

This article is for informational purposes only and does not constitute legal advice. For case-specific guidance, consult Philippine counsel or the appropriate regulatory agency.