How to File a Complaint Against a Lending Company for Excessive Interest and Harassment in the Philippines
(Updated as of the Financial Consumer Protection Act / BSP Circular 1160 series of 2023 and SEC Memorandum Circular 10-2021. Current date: 31 July 2025.)
1. Why this matters
Predatory lending and abusive collection practices have multiplied, especially among unregistered “online lending applications” (OLAs) and storefront micro-financiers. While the Usury Law (Act No. 2655) ceilings were suspended in 1982 (Central Bank Circular 905), Philippine courts still strike down interest rates that are “unconscionable” and reduce them to a reasonable level. At the same time, the Securities and Exchange Commission (SEC) and the Bangko Sentral ng Pilipinas (BSP) now enforce strict rules on harassment, “shaming,” fake legal notices, and data-privacy breaches.
You have several overlapping remedies—administrative, civil, and even criminal. This article walks you through every practical step.
2. Key legal bases
| Law / Regulation | Core rule | Typical relevance |
|---|---|---|
| Republic Act (RA) 9474 – Lending Company Regulation Act & SEC Implementing Rules | Lending companies must register with SEC and follow disclosure & collection rules. | Main basis for SEC sanctions, suspension, or revocation of license. |
| SEC Memorandum Circular 18-2019 (Prohibition of Unfair Debt-Collection Practices) & MC 10-2021 (Expanded Coverage incl. OLAs) | Bans public shaming, use of threats or profane language, contacting persons other than borrower, etc. | Ground for administrative fines (₱25 k – ₱1 M) and closure. |
| BSP Circular 1160-23 & Financial Consumer Protection Act (RA 11765) | Banks, e-money issuers and their collection agents must treat borrowers fairly; BSP may compel restitution and impose penalties. | Basis for complaints against banks, credit-card issuers, finance companies overseen by BSP. |
| Truth in Lending Act (RA 3765) & BSP Circular 730-2001 | Creditors must disclose effective interest rate (EIR) and charges in writing. | Non-disclosure is an administrative offense and a defense in civil cases. |
| Data Privacy Act (RA 10173) & NPC Circular 16-06 | Using your contact list or posting your personal data online without consent is punishable. | File a complaint with National Privacy Commission (NPC). |
| Revised Penal Code (Arts. 282, 287, 356, 365) | Grave threats, unjust vexation, libel/defamation, alarm & scandal. | Criminal complaint vs. individual collectors. |
| Recent jurisprudence: Spouses Abalos v. PNB (G.R. 158989, 2007); Alce v. Go (G.R. 193477, 2012); Cebuana Lhuillier v. Tomty (G.R. 208803, 2020) | SC upholds court power to reduce interest to 6–12 % when “excessive, iniquitous, and unconscionable.” | Useful citation in civil suit or small claims. |
3. What counts as excessive interest
- Interest far above market – SC has repeatedly voided rates of 5 % per month (≈60 % p.a.) and above.
- Hidden charges – “processing fees,” daily penalties, rollover interest, or “VAT” tacked on without disclosure.
- Compound interest without agreement – Lenders need explicit stipulation to capitalize unpaid interest.
- Multiple deductions at release – Net-proceeds test: if you receive less than the face value, the effective rate is computed on what you actually got.
Rule of thumb: Any rate that produces an Effective Interest Rate (EIR) > 36 % per annum tends to be struck down, especially for micro-loans.
4. What qualifies as harassment or unfair collection
- Calling or texting before 6 a.m. or after 10 p.m.
- Using obscenity, threats of bodily harm, or arrest without a court order.
- Publicly posting your debt on Facebook or group chats (“shaming”).
- Contacting your employer, family, or phone contacts other than to locate you once.
- Making fake “subpoena,” “NBI warrant,” or “freeze order” notices.
All are explicitly banned under SEC MC 18-2019 and BSP Circular 1160-23.
5. Evidence you should gather
| Item | Why it matters |
|---|---|
| Loan agreement / promissory note (scanned copy) | Shows the nominal rate & charges. |
| Proof of net proceeds (bank receipt, cash voucher) | To compute real EIR. |
| Screenshots / audio recordings of abusive calls or texts | Primary proof of harassment (ensure date & sender visible). |
| Transaction history or SOA | For interest-reduction computation. |
| Affidavits of witnesses who saw shaming posts or threats | Strengthens administrative & criminal cases. |
Tip: Under the Rules on Electronic Evidence (A.M. 01-7-01-SC), authenticated screenshots are admissible. Have them printed and notarized (jurat).
6. Choosing the proper forum
| Forum | When to use | Filing fee | Typical outcome/time |
|---|---|---|---|
| SEC – Financing & Lending Division (FLODS/CGFD) | Lender is a lending or financing company (incl. OLAs). | Free | Show-cause order in 5 – 15 days; penalties, suspension, revocation, public advisory. |
| BSP – Consumer Assistance Mechanism (bank, credit-card, EMI) | Lender is a bank, thrift bank, credit-card issuer, EMI. | Free | Mediation within 10 days; BSP may order reimbursement, adjust interest, fine bank ₱50 k – ₱200 k per violation. |
| DTI – Fair Trade Enforcement | “Buy-now-pay-later,” appliance stores misrepresenting financing. | Free | Mediation; cease-and-desist orders under Consumer Act. |
| NPC | They scraped your contacts, posted selfies without consent. | Free | Compliance order; ₱500 k – ₱5 M fines; criminal referral. |
| City / Provincial Prosecutor | Threats, unjust vexation, libel, fake documents. | Filing fee ₱ ~300 | Inquest/prelim investigation; warrants of arrest, criminal trial. |
| Civil action (RTC, MTC, or Small Claims ≤ ₱1 M) | Nullify or reform contract; recover payments, damages. | ₱1 k – ₱10 k docket; Small Claims ₱2 k | Decision 3 – 12 months; interest reduced to 6 % or full rescission. |
7. Step-by-step guide (SEC route—most common for OLAs)
- Prepare documents above; convert to PDF or JPG.
- Draft a Demand Letter (optional but recommended): State that interest is excessive/unconscionable, cite RA 9474, MC 18-2019, give 5 days to correct. Send via e-mail, registered mail, or the in-app chat. Keep proof of sending.
- Download SEC Complaint Form (CGFD Form 2021-01) or use eFAST portal: Complainant details, company name, registration number or OLA bundle ID, facts, relief sought.
- Attach evidence; execute a Verification & Certification of Non-Forum Shopping before a notary.
- Submit via e-mail (flod-complaints@sec.gov.ph) or upload thru eFAST.
- SEC issues a Show-Cause Order within 5-15 working days. The company must answer.
- Mediation / Clarificatory Conference – optional; you may attend virtually.
- SEC resolution: fines, suspension, revocation, referral to NPC/BSP/DOJ. You receive a copy.
- If harassment continues, forward the SEC order to Google Play / Apple App Store—apps are delisted quickly.
8. Step-by-step guide (BSP route—banks & credit cards)
- Exhaust the bank’s internal complaints desk – mandatory under BSP 1160-23 (15 BD to resolve).
- If unhappy, fill out the BSP Consumer Complaint Form and e-mail to consumeraffairs@bsp.gov.ph.
- Attach SOA, demand letter, and harassment proof.
- BSP sends Notice to Respondent Bank (10 BD to reply).
- BSP orders adjustment (e.g., interest claw-back, waiver of fees) or imposes fines; average 30-60 days.
- Non-compliance → elevated to Monetary Board; bank officers may face disqualification.
9. Filing a small-claims case to cut interest
For amounts ≤ ₱1 M (inclusive of interest & penalties) you may use AM 08-8-7-SC (Revised 2022):
- Demand letter (10 days wait).
- Fill out Form 1-SC; attach loan contract & computation sheet showing usurious rate.
- Pay ₱2 k docket + ₱500 service.
- Court issues Summons; hearing within 30 days; decision immediately after same-day hearing.
- Judges routinely reduce interest to the legal rate (6 % p.a.) citing Abalos & Alce cases.
10. Criminal cases worth considering
| Offense | Elements | Possible penalty |
|---|---|---|
| Grave threats (Art. 282 RPC) | Threat to inflict harm, with demand for payment. | Arresto mayor to prisión correccional + fine. |
| Unjust vexation (Art. 287) | Annoying acts without lawful reason, e.g., 50 calls/day. | Arresto menor or fine ≤ ₱40 k. |
| Libel / Cyber-libel (Art. 353 & RA 10175) | Posting you are a “thief” or “scammer” on Facebook. | Prisión correccional in its minimum to medium + damages. |
| Falsification (Art. 172) | Fake demand letters claiming to be from a court/NBI. | Prisión correccional. |
File an affidavit-complaint at the prosecutor’s office; attach SEC/BSP findings to strengthen probable cause.
11. Costs, timelines & realistic expectations
| Action | Typical cost | Real-world duration | Likely outcome |
|---|---|---|---|
| SEC complaint | ₱0 (notarization ₱200) | 1 – 3 months | Fine & app shutdown; harassment stops quickly. |
| BSP complaint | ₱0 | 1 – 2 months | Interest waived or refunded; collection toned down. |
| Small-claims | ₱2.5 k | 1 – 2 months | Interest cut to 6 %; payment plan fixed. |
| Civil case (RTC) | ₱15 k+ | 1 – 3 years | Contract reformed; moral & exemplary damages possible. |
| Criminal case | ₱300 filing + lawyer fees (optional) | 6 months – 2 years | Fine, jail for abusive collector; strong deterrent. |
12. Frequently-asked questions
1. Can I complain if I agreed to the high rate? Yes. Consent does not validate unconscionable stipulations; courts may still reduce or void them.
2. Will filing a complaint stop collections? Filing does not suspend your obligation, but regulators often direct companies to halt harassment pending investigation.
3. Do I need a lawyer? Not for SEC/BSP or small-claims. For criminal or large civil cases, counsel is advisable.
4. Can I block the app or change SIM? You can, but keep evidence first. Deleting the app may erase chat logs. Export or screenshot before uninstalling.
5. What if the company is unregistered? SEC will issue a public Advisory and endorse to NBI Cybercrime; debts may be deemed unenforceable for violating RA 9474.
13. Practical tips to strengthen your case
- Use e-mail to communicate—easy to trace.
- Record calls (one-party consent rule in PH).
- Maintain a timeline log of every call/text.
- Compute effective rate with online calculators to show >36 % p.a.
- Join support groups like “Pinoy Victims of Online Lending Apps” (Facebook) for templates and shared experience.
14. Conclusion
Borrowers are protected by an expanding web of Philippine regulations that condemn both exorbitant interest and harassment. By documenting every interaction, choosing the right forum, and asserting your rights promptly, you can stop abusive practices, slash unfair charges, and even help regulators close down predatory lenders altogether.
(This article is for general information only and does not create an attorney-client relationship. For specific situations, consult a qualified lawyer or the Public Attorney’s Office.)