In the Philippines, the relationship between a creditor and a debtor is governed not only by the contract they signed but also by stringent regulatory frameworks designed to protect human dignity and privacy. While creditors have the right to collect legitimate debts, this right is not absolute and terminates where harassment begins.
1. Regulatory Framework: SEC Memorandum Circular No. 18 (Series of 2019)
The Securities and Exchange Commission (SEC) issued MC No. 18 to specifically curb "unfair debt collection practices" by financing and lending companies. This is the primary administrative weapon for debtors facing aggressive collectors.
Prohibited Acts of Harassment
Under this circular, the following actions are considered "unfair" and "unconscionable":
- Physical Violence: The use or threat of physical harm against the debtor, their family, or their property.
- Obscene Language: Using profane, insulting, or abusive language to shame the debtor.
- Public Disclosure: Posting the debtor’s name or personal details on social media (online shaming) or public spaces to humiliate them.
- False Representation: Pretending to be a lawyer, a court officer, or a government official to intimidate the debtor.
- Harassing Contact: Contacting the debtor at unreasonable hours (defined as before 6:00 AM or after 10:00 PM), unless the debtor gave prior consent.
- Contacting Third Parties: Contacting people in the debtor's contact list who are not co-makers or guarantors, or disclosing the debt to third parties.
2. The Data Privacy Act of 2012 (RA 10173)
Many modern debt collection agencies, especially those operating via mobile apps, "harvest" contact lists. This is a direct violation of the Data Privacy Act.
- Unauthorized Processing: Accessing your phone's contact list, photos, or social media accounts without explicit, informed consent for that specific purpose.
- Malicious Disclosure: Disclosing a debtor's sensitive personal information to third parties with the intent to cause harm or humiliation.
Debtors can file a formal complaint with the National Privacy Commission (NPC), which has the power to issue "Cease and Desist" orders and recommend criminal prosecution.
3. Criminal Remedies under the Revised Penal Code
If the harassment escalates, the debtor can look toward the Revised Penal Code (RPC) for criminal charges:
| Offense | Description |
|---|---|
| Unjust Vexation | Any human conduct which, although not causing physical injury, unjustly annoys or vexes an innocent person. |
| Grave or Light Threats | Threatening to inflict a wrong upon the person, honor, or property of the debtor or their family. |
| Grave or Light Coercion | Forcing a debtor to do something against their will (like surrendering property) without legal authority. |
| Libel / Cyberlibel | Public and malicious imputation of a vice or defect (e.g., calling someone a "thief" on Facebook) to dishonor them. |
Note: Under the Cybercrime Prevention Act (RA 10175), penalties for libel are higher if the harassment is committed through the internet or social media.
4. Administrative Remedies: BSP and SEC
The forum for your complaint depends on the type of institution harassing you:
For Banks and Credit Card Companies
The Bangko Sentral ng Pilipinas (BSP) oversees banks. Under BSP Circular No. 454, credit card issuers must resort to "only fair and reasonable" means of collection.
- Remedy: File a complaint through the BSP Consumer Assistance Management System (CAMS).
For Lending and Financing Apps
The SEC handles non-bank lending companies.
- Remedy: File a formal complaint with the SEC’s Corporate Governance and Finance Department (CGFD).
5. Civil Remedies: The Civil Code
Article 19, 20, and 21 of the Civil Code of the Philippines (the "Human Relations" provisions) state that every person must, in the exercise of his rights, act with justice, give everyone his due, and observe honesty and good faith.
If a collection agency's harassment causes mental anguish, sleepless nights, or besmirched reputation, the debtor can sue for Damages:
- Moral Damages: For psychological suffering.
- Exemplary Damages: To set an example so the company doesn't repeat the conduct.
- Attorney's Fees: To cover the cost of the lawsuit.
6. Procedural Steps for Victims
If you are a victim of debt collection misconduct, follow this general workflow to build a strong case:
- Document Everything: Take screenshots of harassing texts, record phone calls (inform them you are recording), and save copies of defamatory social media posts.
- Identify the Entity: Find the full name of the lending company and their SEC registration number.
- Demand Letter: Send a formal letter to the company demanding they cease the harassment.
- File with Agencies: * For Privacy violations: National Privacy Commission.
- For Unfair Collection: SEC or BSP.
- For Criminal acts: Philippine National Police (PNP) Cybercrime Group or the local Prosecutor's Office.
Summary Table of Remedies
| Type of Misconduct | Legal Basis | Primary Agency |
|---|---|---|
| Online Shaming / Calling Contacts | Data Privacy Act | National Privacy Commission |
| Threats / Abusive Language | SEC MC 18 / RPC | SEC / Local Courts |
| Middle-of-the-night calls | SEC MC 18 / BSP Circular 454 | SEC / BSP |
| Posting "Wanted" posters | Cyberlibel / RPC | PNP / NBI / Prosecutor |