In the Philippines, the rise of digital lending platforms and Fintech has been accompanied by a surge in predatory collection practices. Debtors often find themselves subjected to threats, shaming, and privacy violations. However, Philippine law provides a robust framework to protect borrowers from such abuses, primarily through the regulations of the Securities and Exchange Commission (SEC), the National Privacy Commission (NPC), and existing penal laws.
1. SEC Memorandum Circular No. 18 (Series of 2019)
This is the primary regulation governing the conduct of lending and financing companies. It explicitly prohibits "unfair collection practices." Lending companies, including their third-party service providers (collection agencies), are forbidden from:
- Threats of Violence: Using or threatening to use physical force or other criminal means to harm the person, reputation, or property of the debtor.
- Obscene/Profane Language: Using insults or symbols intended to shame the borrower.
- Disclosure of Names: Posting the names of "delinquent" borrowers in public places or on social media.
- False Representations: Claiming to be a lawyer, a court representative, or a government official to intimidate the debtor.
- Unreasonable Contact Hours: Contacting the debtor at unreasonable hours (defined as between 10:00 PM and 6:00 AM), unless the debt is more than 60 days past due or the borrower has given express consent.
2. The Data Privacy Act of 2012 (Republic Act No. 10173)
Many online lending apps (OLAs) engage in "contact list grabbing," where they access a borrower’s phone contacts to harass friends and family. This is a severe violation of the Data Privacy Act.
- Unauthorized Processing: Lending companies cannot use personal information for purposes other than what was disclosed at the time of collection.
- Malicious Disclosure: Disclosing a borrower’s sensitive personal information (like the fact that they have an unpaid debt) to third parties without consent or legal mandate is punishable by imprisonment and heavy fines.
- The "Right to be Forgotten": Borrowers have the right to demand the suspension, withdrawal, or removal of their personal data if it is being processed unlawfully.
3. Cybercrime Prevention Act of 2012 (Republic Act No. 10175)
When harassment occurs online—via Facebook, Viber, or SMS—it may fall under the Cybercrime Prevention Act.
- Cyber Libel: Publicly and maliciously attributing a vice or defect to a person via the internet (e.g., posting "Scammer" or "Magnanakaw" on a borrower's profile) constitutes cyber libel.
- Computer-related Identity Theft: If a lender creates a fake social media account using the borrower’s photo to solicit funds or shame them, they are liable under this Act.
4. Revised Penal Code and Special Laws
Traditional criminal charges can also be filed depending on the nature of the harassment:
- Grave or Light Coercion: When a lender compels a debtor to do something against their will (like surrendering property) through violence or intimidation.
- Unjust Vexation: A broad category covering any conduct that irritates, disturbs, or enlightens the mind of a person without physical harm.
- Grave or Light Threats: Threatening to commit a crime against the person or property of the debtor.
5. Remedies and Steps for Recourse
Borrowers facing harassment have several legal avenues for protection:
| Agency | Role/Action |
|---|---|
| SEC (Corporate Governance & Finance Dept) | To file formal complaints against lending companies. The SEC can revoke the "Certificate of Authority" of companies violating MC No. 18. |
| National Privacy Commission (NPC) | To report data breaches, unauthorized access to contacts, and online shaming. |
| PNP Anti-Cybercrime Group (ACG) | To report online threats, identity theft, and cyber libel. |
| Small Claims Court | For disputes involving the debt itself, though this handles the civil aspect rather than the harassment. |
Summary of Prohibited Conduct
It is a common misconception that "owing money" justifies any form of collection. Under Philippine law, debt is a civil obligation. Failure to pay a simple loan (not involving bouncing checks or fraud) is not a criminal offense—no one can be imprisoned for non-payment of debt under the 1987 Constitution. Conversely, harassment is a criminal and administrative violation for which the lender can be prosecuted.