Legal Recourse for Harassment by Online Lending Companies in the Philippines
This article provides a comprehensive overview of the legal options and practical steps available when borrowers are harassed by online lending platforms. It is written for general information only and is not a substitute for specific legal advice.
1. Overview of the Philippine Regulatory Landscape
Republic Act (RA) 9474 – The Lending Company Regulation Act of 2007**
- Requires all non-bank lenders to be licensed by the Securities and Exchange Commission (SEC).
- Empowers the SEC to revoke licenses, impose fines, and issue cease-and-desist orders for abusive collection practices.
Bangko Sentral ng Pilipinas (BSP) Circular Nos. 454 & 702 (and succeeding circulars)
- Apply to banks and BSP-supervised financial institutions (BSFIs).
- Mandate fair collection policies, prohibit threats, obscenity, and disclosure of borrower information.
SEC Memorandum Circular (MC) 18-2019, as amended by MC 10-2021
- Explicitly bans “unfair debt collection” by all lending and financing companies.
- Forbidden acts include: public shaming, contacting persons in the borrower’s contact list, using profane language, threats of violence or criminal prosecution, and misinformation about the amount or legal status of the debt.
- Penalties: ₱25,000–₱1,000,000 per offense, suspension, or revocation of license; officers may be blacklisted.
*RA 11765 – The Financial Products and Services Consumer Protection Act (2022)***
- Gives the BSP, SEC, Insurance Commission, and Cooperative Development Authority expanded powers to adjudicate consumer complaints and order restitution.
RA 10173 – The Data Privacy Act of 2012**
- Penalizes unauthorized processing, excessive collection, or illegal disclosure of personal data—common in “contact scraping” apps used by rogue lenders.
RA 10175 – The Cybercrime Prevention Act of 2012**
- Covers online libel, threats, coercion, and identity theft committed through ICT.
Civil Code provisions (Arts. 19, 20, 21, 26, 32, 2176)
- Recognize tort liability for abuse of rights, acts contrary to morals, privacy invasion, and quasi-delict.
Revised Penal Code (RPC) offenses
- Art. 286 – Grave coercion
- Art. 287 – Unjust vexation
- Art. 353 – Libel
- Art. 358 – Slander
2. Typical Harassment Tactics and Their Legal Classification
| Harassing Conduct | Possible Legal Violation(s) | Forum for Redress |
|---|---|---|
| Threatening to post the borrower’s face on social media | Cyber-libel (RPC Art. 353), Unfair collection (SEC MC 18-2019), Data Privacy Act | NBI/PNP Anti-Cybercrime, SEC, courts |
| Accessing the phone’s contacts and blasting texts that the borrower is a “scammer” | Data Privacy Act, Cyber-libel, Unfair collection | National Privacy Commission (NPC), SEC |
| Repeated midnight calls and profanity | Unfair collection, unjust vexation | SEC, barangay/Katarungang Pambarangay, courts |
| False threat of arrest warrants | Grave coercion, unfair collection, estafa | PNP, SEC, courts |
| Misstatement of the outstanding balance | Fraud, unfair collection | SEC, BSP (if BSFI), DTI for consumer complaints |
3. Administrative Remedies
| Agency | Jurisdiction | Relief Available | Procedure |
|---|---|---|---|
| SEC Financing & Lending Division | All lending/financing companies | License suspension/revocation, fines, CDO | File a sworn complaint (Form FLC-I). Attach evidence (screenshots, call logs). Free of filing fees. SEC issues show-cause order, then hearing. |
| National Privacy Commission | Data-privacy-related harassment | Compliance orders, fines, criminal referral | Initial “Assisted Complaint Resolution,” then formal investigation. |
| BSP Financial Consumer Protection Department | Banks & BSFIs only | Penalties, restitution, directive to stop harassment | File an online complaint; BSP may summon bank and order corrective action. |
| Department of Trade & Industry (DTI) – Consumer Protection Group | Non-SEC-registered entities using digital apps | Cease-and-desist, fines | Mediation-arbitration under Consumer Act. |
4. Criminal Remedies
Sworn Complaint before the Office of the City/Provincial Prosecutor
- Attach print-outs, affidavits, and certification from barangay if mediation failed.
- Prosecutor conducts inquest (for warrantless arrest) or pre-investigation.
Cybercrime Complaints
- File with the NBI-Cybercrime Division or PNP Anti-Cybercrime Group.
- Provide the “.apk” file of the lending app if possible for forensic extraction.
Barangay Protection Orders (BPO)
- If the borrower is a woman or a child and threats fall under RA 9262 (VAWC), immediate BPO may be issued.
5. Civil Remedies
| Cause of Action | Court | Requirements | Damages Recoverable |
|---|---|---|---|
| Tort under Art. 26 (privacy) | Regular trial court (≥ ₱2 M) or first-level court (< ₱2 M) | Proof of wrongful disclosure | Moral, exemplary damages, attorney’s fees |
| Quasi-delict (Art. 2176) | Same | Negligent or intentional act causing injury | Actual and moral damages |
| Independent civil action for defamation (Art. 33) | Same | Defamatory statements | Same as tort plus nominal damages |
Small Claims: If the borrower merely seeks ≤ ₱1 M actual damages (after April 11 2022 threshold increase), the suit may be filed under the revised Rules on Expedited Procedures in the First Level Courts without a lawyer.
6. Non-Litigious and Preventive Measures
- Barangay Conciliation – mandatory for parties in the same city/municipality unless an exception applies (e.g., acts are punishable by ≥ 6-year imprisonment or involve government entities).
- Demand Letter / Cease-and-Desist – often effective; cite SEC MC 18-2019 and Data Privacy Act.
- Telco Spam Reporting – forward abusive SMS to 7726 or use telco blocking tools.
- Google Play / Apple App Store Report – apps can be pulled down for policy violations.
- Credit Counseling and Restructuring – negotiate through accredited credit counselors or the Financial Rehabilitation and Insolvency Act (FRIA) framework if insolvency is imminent.
7. Evidence-Building Tips
- Preserve screenshots with visible timestamps.
- Record phone calls (allowed under People v. Dela Cruz, CA-G.R. CR No. 25410, 2019, so long as you are a party to the conversation).
- Secure certified true copies of SEC registration and company profile via the SEC Express System to establish lender identity.
- Keep records of repayments to refute inflated claims.
8. Recent Developments & Jurisprudence
- SEC En Banc Decisions 2023-2024 – multiple online lenders permanently revoked for “contact-list harvesting.”
- NPC Cases No. 17-001 & 21-041 – NPC affirmed that scraping contacts without granular consent is “unauthorized processing” punishable under RA 10173.
- People v. Besario, G.R. 251794 (Sept 26 2023) – Supreme Court clarified that repeated threatening SMS constitutes Grave Coercion even if no imminent physical harm was intended.
9. Step-by-Step Action Plan for Borrowers
Document Every Interaction – start a harassment log.
Send a Formal Notice to the Lender demanding cessation.
File Parallel Administrative Complaints:
- SEC (unfair collection)
- NPC (data privacy)
Consider Criminal Case if threats, coercion, or libel are present.
Explore Civil Action for damages if harm (mental anguish, job loss) is demonstrable.
Seek Professional Advice – Public Attorney’s Office (PAO) or Integrated Bar of the Philippines (IBP) legal aid if funds are limited.
10. Key Takeaways
- Harassment is illegal even if the debt is valid.
- Multiple venues—administrative, civil, criminal—may be pursued simultaneously; they are not mutually exclusive.
- Prompt evidence preservation dramatically increases the chance of sanctions against abusive lenders.
- Regulators are increasingly proactive; recent SEC closures show a policy shift toward consumer protection.
- Know your rights: silence, privacy, and dignity are protected under Philippine law regardless of debt status.
Disclaimer: Laws and regulations cited are current as of 30 May 2025. Future amendments or new jurisprudence may affect the rights and remedies discussed. Always consult a qualified Philippine lawyer for personalized guidance.