The rise of Financial Technology (FinTech) in the Philippines has led to the proliferation of Online Lending Platforms (OLPs). While they provide accessible credit, many have resorted to "predatory lending" and "debt shaming." Filipino borrowers are protected by a robust framework of laws and administrative circulars designed to curb these abusive practices.
1. Prohibited Acts: What Constitutes Harassment?
Under SEC Memorandum Circular No. 18 (Series of 2019), the Securities and Exchange Commission (SEC) explicitly prohibits "unfair debt collection practices." Harassment occurs when a lending company or its third-party agents engage in the following:
- Debt Shaming: Contacting persons in the borrower’s contact list without consent, or posting the borrower’s name and debt details on social media (e.g., Facebook).
- Threats of Violence: Using or threatening to use physical force or other criminal means to harm the person, reputation, or property of the borrower.
- Obscene/Profane Language: Using insults, slurs, or profane language to coerce payment.
- False Representation: Claiming to be lawyers, police officers, or court officials; or threatening the borrower with immediate "arrest" or "jail time" for non-payment (Note: In the Philippines, there is no imprisonment for non-payment of debt under the Constitution, unless fraud or estafa is involved).
- Unreasonable Contact Hours: Contacting the borrower between 10:00 PM and 6:00 AM, unless the borrower gave express consent.
2. The Data Privacy Aspect (RA 10173)
Most lending apps gain access to a borrower's phone contacts, gallery, and social media accounts through app permissions. The Data Privacy Act of 2012 (RA 10173) protects borrowers from the "unauthorized processing" and "malicious disclosure" of personal information.
- Unauthorized Access: If an app accesses your contacts to harass your friends or family about your debt, they are violating the principle of purpose limitation.
- National Privacy Commission (NPC) Circular 20-01: This specifically prohibits OLPs from using personal data to harass or embarrass borrowers.
3. Legal Remedies and Actions
If you are a victim of harassment, you have several legal avenues for redress:
A. File a Complaint with the SEC
The SEC’s Corporate Governance and Finance Department (CGFD) monitors lending companies. If the app is a registered lending or financing company, the SEC can impose fines, suspend their license, or revoke their Certificate of Authority.
- Process: Submit a formal complaint via the SEC’s online portal or email, attaching screenshots of the harassing messages and the loan agreement.
B. File a Complaint with the National Privacy Commission (NPC)
If the harassment involves "debt shaming" or unauthorized use of your contact list, file a "Privacy Complaint." The NPC has the power to order the shutdown of apps and recommend criminal prosecution for data privacy violations.
C. Criminal Charges under the Cybercrime Prevention Act (RA 10175)
Harassment, threats, and defamation committed through online platforms can be prosecuted as Cyber Libel or Unjust Vexation under the Revised Penal Code, in relation to the Cybercrime law. You can report these incidents to the PNP Anti-Cybercrime Group (PNP-ACG) or the NBI Cybercrime Division.
4. How to Document the Harassment
For any legal action to succeed, evidence is paramount. Borrowers should:
- Take Screenshots: Capture all threatening texts, emails, and social media posts. Include the timestamp and the sender’s number/account name.
- Save the Loan Contract: Keep a copy of the original Terms and Conditions to check if the interest rates and fees comply with BSP Circular No. 1133 (which sets ceilings on interest rates for small-value loans).
- Do Not Delete the App Immediately: While it is tempting to uninstall the app, ensure you have gathered all necessary transaction history and permission logs first.
5. Summary of Key Laws
| Law / Regulation | Protection Offered |
|---|---|
| SEC MC No. 18 (2019) | Prohibits unfair collection practices and harassment. |
| RA 10173 (Data Privacy Act) | Protects personal data from being used for debt shaming. |
| RA 10175 (Cybercrime Law) | Penalizes online threats, libel, and harassment. |
| Art. III, Sec. 20, 1987 Constitution | States that "No person shall be imprisoned for debt." |
| BSP Circular No. 1133 | Sets limits on interest rates and penalties for lending apps. |
Conclusion
Debt collection is a legitimate business activity, but it must be conducted within the bounds of law and human dignity. The Philippine legal system provides a clear path for borrowers to fight back against abusive lending apps through the SEC, NPC, and law enforcement agencies. Protecting one's privacy and reputation is as much a right as the obligation to settle financial liabilities.