In the Philippines, while the law recognizes the right of creditors to collect legitimate debts, this right is not absolute. The legal framework provides robust protections to ensure that the collection process remains civil and respects the human dignity and privacy of the debtor. Debt collection agencies (DCAs) and financial institutions must adhere to strict guidelines, primarily enforced by the Bangko Sentral ng Pilipinas (BSP) and the Securities and Exchange Commission (SEC).
1. Prohibited Acts: What Constitutes Harassment?
Under BSP Circular No. 454 and SEC Memorandum Circular No. 18 (Series of 2019), specific behaviors are classified as unfair collection practices. These include:
- Threats of Violence: Any use or threat of physical harm against the debtor, their family, or their property.
- Obscene or Profane Language: Using insults or derogatory language to shame the debtor.
- Public Disclosure of Debt: Posting the name of the debtor on social media, in public spaces, or informing unauthorized third parties (neighbors, employers, colleagues) about the debt.
- False Representation: Claiming to be a lawyer, police officer, or government agent, or sending documents that look like official court summons when they are not.
- Contacting at Unreasonable Hours: Communicating with the debtor before 6:00 AM or after 9:00 PM, unless the debtor has given prior consent.
- Continuous Harassment: Repeatedly calling or messaging with the intent to annoy or abuse the debtor.
2. Key Regulatory Protections
SEC Memorandum Circular No. 18, Series of 2019
This is the primary regulation for Financing Companies (FCs) and Lending Companies (LCs), including online lending platforms. It explicitly prohibits "harassment" and "unfair collection practices."
- Violation Consequences: Companies found violating these rules face hefty fines (ranging from ₱25,000 to ₱1,000,000) and the potential revocation of their Certificate of Authority to operate.
BSP Circular No. 454 (Manual of Regulations for Banks)
This circular governs banks and their subsidiary credit card companies. It mandates that banks ensure their third-party collection agents act with professionalism. Banks remain "ultimately responsible" for the actions of the agencies they hire.
The Data Privacy Act of 2012 (RA 10173)
DCAs often access a debtor's contact list or social media. This is a violation of the Data Privacy Act if the data was obtained or used without explicit consent for that specific purpose. Shaming a debtor online also constitutes a violation of privacy rights.
3. Civil and Criminal Liabilities
Beyond administrative fines, individual collectors and the agencies they represent may be liable under the Revised Penal Code and other special laws:
| Legal Basis | Offense | Description |
|---|---|---|
| Art. 282, RPC | Grave Threats | Threatening to inflict a wrong amounting to a crime (e.g., "I will kill you"). |
| Art. 287, RPC | Unjust Vexation | Any human conduct which, although not physical, unjustly annoys or vexes another. |
| Art. 353, RPC | Libel / Cyberlibel | Publicly and maliciously imputing a vice or defect to dishonor the debtor (common in social media shaming). |
| RA 10175 | Cybercrime Law | Higher penalties apply if the harassment or libel occurs via the internet or mobile phones. |
4. Steps for Redress
Debtors facing harassment have several avenues for legal recourse:
- Cease and Desist Demand: Send a formal letter to the collection agency demanding they stop the specific harassing behaviors and citing the relevant SEC/BSP circulars.
- Formal Complaint with the SEC: For lending and financing companies (especially mobile apps), complaints can be filed through the SEC Corporate Governance and Finance Department.
- BSP Consumer Affairs: For banks and credit card companies, debtors can reach out to the BSP's Consumer Protection and Market Conduct Office.
- National Privacy Commission (NPC): If the agency used private data illegally or engaged in "doxing," a complaint for violation of the Data Privacy Act is appropriate.
- Police Assistance: If there are direct threats of physical harm, the debtor should report the incident to the Philippine National Police (PNP) Anti-Cybercrime Group or the local precinct.
5. Important Legal Distinction: Debt is Not a Crime
It is a fundamental principle under Article III, Section 20 of the 1987 Philippine Constitution that "No person shall be imprisoned for debt." While a debtor can be sued in a Civil Case for "Sum of Money" and may have their assets garnished to pay the debt, they cannot be sent to jail simply because they cannot afford to pay. Criminal cases only arise if the debt involved fraud (Estafa) or the issuance of bouncing checks (BP 22), but the act of owing money itself is not a criminal offense.