Harassment by Online Lending Apps in the Philippines
Legal Framework & Remedies
Disclaimer: This article is for general information only and is not a substitute for legal advice. Laws cited are current as of July 19 2025.
1. The Rise of Online Lending Apps (OLAs)
Explosion of “quick‑cash” apps (2017‑present): low KYC, 24‑hour approval, high interest & penalty fees.
Common abusive collection tactics:
- Accessing a borrower’s phone contacts and mass‑messaging them.
- Public shaming on social media, threat texts/calls.
- Impersonating lawyers, police, or “NBI” agents.
- Inflating balances with hidden charges.
These practices spurred a multi‑agency crackdown and new laws on debt‑collection conduct.
2. Licensing & Primary Regulators
| Regulator | What it covers | Key issuances |
|---|---|---|
| Securities and Exchange Commission (SEC) | All lending and financing companies, including fintech OLAs | ‑ RA 9474 (Lending Company Regulation Act, 2007) ‑ SEC Memo‑Circular 19‑2022 (Registration & disclosure rules for online lending) ‑ SEC Memo‑Circular 18‑2019 (Unfair Debt Collection Practices) |
| Bangko Sentral ng Pilipinas (BSP) | Banks, EMI wallets, BNPL issued by banks | ‑ RA 11765 (Financial Products & Services Consumer Protection Act, 2022) ‑ BSP Circular 1160 (2023) on debt‑collection standards |
| National Privacy Commission (NPC) | Personal‑data processing by any entity | ‑ RA 10173 (Data Privacy Act, 2012) ‑ NPC Advisory Opinions on contact‑scraping & harassment |
| Department of Trade & Industry (DTI) | Consumer complaints vs. unlicensed sellers | ‑ RA 7394 (Consumer Act) |
Unlicensed or rogue apps frequently lack SEC‐issued Certificate of Authority (CA); operation without a CA is a criminal offense (RA 9474 §12).
3. What Counts as “Harassment” or Unfair Collection?
SEC Memo‑Circular 18‑2019 lists prohibited acts for financing/lending companies. Highlights:
- Use of obscenities, insults, slurs, or profane language.
- Contacting any person other than the borrower about the debt except to obtain location information – and even then, only once.
- Threats of violence, criminal prosecution, or arrest when no case has been filed.
- False representation as a lawyer, court officer, or government agent.
- Public disclosure of borrower’s debt (text blasts, Facebook posts).
- Excessive contacting: more than once a day or at unreasonable hours (before 6 AM or after 10 PM).
Violation is punishable by ₱25,000 – ₱1,000,000 fine per count, suspension or revocation of SEC license, cease‑and‑desist orders, and referral for criminal prosecution.
4. Data Privacy Violations
OLAs often compel borrowers to grant Android “READ_CONTACTS” permission. Two major breaches arise:
| Act | Applicable Law | Possible Penalties |
|---|---|---|
| Processing contact lists without valid consent or for an illegal purpose (harassment) | RA 10173 §25 & §34 | Up to ₱5 M fine and/or 6 yrs imprisonment |
| Disclosing personal data of contacts to the public | RA 10173 + RA 10175 (Cybercrime) | Same as above, plus cyber‑libel or unjust vexation |
The NPC can order temporary or permanent BAN of an app in app stores, levy administrative fines, or endorse for prosecution.
5. Civil & Criminal Reliefs under the Civil Code and Penal Code
- Civil Code Art. 19‑21 & 26 – a borrower may sue for moral & exemplary damages for acts “contrary to morals, good customs or public policy.”
- Unjust Vexation (Revised Penal Code §287) – light offense but easy to prove for repeated nuisance calls.
- Grave Threats, Coercion, or Libel – if OLAs threaten bodily harm or publish defamatory posts.
- Anti‑Cybercrime Act (RA 10175) overlays higher penalties when done online.
- Anti‑Violence Against Women & Children Act (RA 9262) – when the victim is a woman or minor and threats constitute “economic abuse.”
6. The New Financial Products and Services Consumer Protection Act (RA 11765, 2022)
- Elevates abusive collection as a consumer protection violation.
- Empowers BSP, SEC, IC, CDA to issue restitution orders and impose fines up to ₱2 M per act, plus daily penalties.
- Introduces “Restitution Fund” to pay victims swiftly.
- Provides a 90‑day dispute‑resolution window before filing court action.
7. Enforcement Trends & Case Studies
| Year | Agency Action | Result |
|---|---|---|
| 2019 | SEC CDO vs. “Cash3”, “QuickPera” (33 apps) | Apps delisted from Play Store; ₱5 M fines |
| 2020 | NPC decision vs. FDS Finance | Order to delete illegally collected contacts; ₱200 K admin fine |
| 2023 | SEC revokes PesoClaro Lending Corp. CA | License cancelled for repeated harassment |
| 2024 | First RA 11765 test case vs. unregistered “e‑Pautang” | ₱1.5 M fine; refund of overcharges to 2,148 borrowers |
| 2025 (Q1) | NCR Trial Ct. issues TRO stopping text‑blast threats of “FastLoan” | Creditor restrained from contacting non‑borrowers |
8. Practical Remedies for Victims
| Remedy | Where / How | Key Steps & Tips |
|---|---|---|
| A. File an SEC complaint | SEC Philippines CGFD portal or walk‑in | Attach screenshots, call logs, proof of debt, ID. SEC may issue CDO in 24‑48 h for severe cases. |
| B. File an NPC complaint | Online: complaints@privacy.gov.ph | Show permission screen, data‑sharing policy, and evidence of misuse. |
| C. File a criminal case | Barangay (for mediation) → City/Provincial Prosecution Office | Sworn statement + evidence. Light offenses (Unjust Vexation) need barangay conciliation first (Katarungang Pambarangay Law). |
| D. Civil suit for damages | RTC (over ₱300 K) or Small Claims (<₱400 data-preserve-html-node="true" K, no lawyer needed) | Demand letter first; claim moral, exemplary, attorney’s fees. |
| E. Seek BSP mediation (if lender is a bank/EMI) | BSP Consumer Assistance (FINCARE) | Free, 15‑business‑day mediation. |
| F. Report to PNP‑ACG / NBI‑CCD | Cybercrime hubs nationwide | Preserve digital evidence; request cyber‑libel inquest if threats are urgent. |
| G. Debt Relief & Counseling | Public Attorney’s Office (PAO) or accredited CDA mediators | For indigents; can negotiate restructuring or condonation of excessive fees. |
9. Step‑by‑Step Checklist
- Document: Screenshot every message, record calls (tell them you are recording).
- Revoke app permissions (Android > Settings > Apps > Permissions).
- Send a Demand/Cease‑and‑Desist e‑mail citing SEC MC 18‑2019 and RA 10173.
- Escalate to SEC/NPC with the demand letter & proof.
- Pay only legitimate principal + lawful interest; refuse “penalty fees” exceeding the contract + legal caps (Usury may be gone, but excessive interest can be struck down as unconscionable under jurisprudence).
- Consider a payment plan through accredited credit‑counseling NGOs if debt is unmanageable.
- Explore civil/criminal cases if harassment continues or you suffered moral damages.
10. Upcoming Reforms & Watch‑List
- Senate Bill 1300 (“Fair Debt Collection Practices Act”) – would criminalize any third‑party disclosure of debt, cap calls to three per week, mandate collectors’ ID numbers.
- BSP digital‑lending supervisory sandbox (2025 pilot) – lenders must embed “data‑minimization APIs” (no contact scraping) to stay in app stores.
- SEC e‑KYC Registry (launch 2026) – centralized borrower ID to cut multiple‑app harassment.
11. Best Practices for Borrowers
- Read app permissions; deny contact/sms access.
- Prefer BSP‑supervised banks or cooperatives over anonymous OLAs.
- Keep written records of all payment receipts.
- If already harassed, don’t delete messages—they are evidence.
- Join support groups (e.g., Borrowers’ Collective PH on Facebook) for template complaints and moral support.
12. Conclusion
Harassment by online lending apps is no longer a “gray area” in Philippine law. SEC MC 18‑2019, RA 11765, and the Data Privacy Act provide clear prohibitions, multi‑million‑peso fines, and even jail terms. Victims have a toolbox of administrative, civil, and criminal remedies. The key is documentation and swift reporting. As regulators tighten the net and new legislation looms, abusive OLAs face an increasingly hostile legal environment, and borrowers now have concrete avenues for redress.