Liability for Loans Taken in Your Name and Debt-Harassment Remedies (Philippines)

This is general information for the Philippine setting and not a substitute for tailored legal advice.

Executive Summary

You are not civilly liable for a “loan” you did not consent to (e.g., forged/wrongfully obtained e-signature), unless you later ratify it or your own negligence substantially enabled the fraud.
Creditors must prove a valid loan contract (consent, object, cause). A forged signature or fabricated digital assent vitiates consent.
Digital loans rely on device ownership, OTPs, selfies, and e-signatures; these can be rebutted with evidence (SIM-swap, device loss, phishing, deepfake, etc.).
If you co-signed or guaranteed, you’re liable only to the extent of your undertaking, and defenses differ for surety vs guaranty.
Harassment and shaming tactics by collectors are unlawful. You can demand they stop, and report them to the SEC (lending/financing), BSP (banks/e-money), the National Privacy Commission (data/privacy), and law enforcement for threats, coercion, or libel.
Correct the record with the lender and credit bureaus, keep a paper trail, and contest adverse credit with the Credit Information Corporation and private credit bureaus.
Act fast: file fraud reports, freeze accounts, preserve evidence (screenshots, call logs), and issue a written dispute within days.

Part I — Civil Liability for Loans in Your Name

1) When are you liable?

Civil liability generally arises when a valid loan contract exists:

Consent: You signed (wet ink or valid e-signature) or clearly assented in-app (agree checkbox, OTP/SMS, device-based authentication) and understood the terms.
Object and cause: Money was delivered (cash, wallet top-up, bank credit), and you were the intended recipient/beneficiary.
Ratification: Even if there was an initial defect (e.g., a relative applied without telling you), you accepted the money, made payments, or otherwise affirmed the loan after learning of it.
Negligence enabling fraud: If your carelessness (e.g., sharing OTPs, lending your ID/device, obvious PIN on a sticky note) substantially enabled the impostor, a court may apportion liability or deny recovery of losses you could reasonably have prevented.

Key idea: Lenders carry the burden to show you consented. Your task is to create doubt or rebut that proof with credible evidence and a consistent timeline.

2) When are you not liable?

Forgery / identity theft: Your signature was forged, your selfie was spoofed, or someone used your ID and phone without authority.
Lack of authority: A spouse, relative, employee, or agent had no authority (or exceeded it).
No delivery / unjust enrichment: The proceeds never reached you (e.g., sent to a stranger’s wallet).
Defective assent: Consent was vitiated by fraud, intimidation, or mistake (e.g., you thought you were confirming an unrelated transaction or a “KYC update”).

If the lender cannot prove genuine consent or delivery to you, the “loan” is void/unenforceable against you. The lender’s recourse is against the impostor or any negligent intermediary.

3) Electronic & App-Based Loans: What counts as “consent”?

Modern lenders rely on multi-factor signals:

Device/SIM ownership, OTP entry, in-app clicks, e-sign platform logs, IP/device fingerprints, live selfie/LVA checks, and liveness challenges.
These are rebuttable. SIM-swaps, malware, phishing, remote-access tools, cloned devices, and recycled numbers can break the link between you and the transaction.

Your counter-evidence can include:

Police/NBI or ACG report; telco SIM-swap/port-out logs; device theft report; forensic report (if available); timestamped alibis (CCTV, time-clock, airline boarding passes); screenshots of phishing; bank/e-wallet alerts; and witness statements.

4) Special roles and their liabilities

Co-borrower / Joint borrower: You are primary on the debt; the lender can pursue either of you for the entire amount (solidarity—depending on terms).
Guarantor vs Surety:
- A guarantor is secondary; the lender must first proceed against the principal debtor unless the guaranty is solidary.
- A surety is solidarily liable as if the debt were yours; defenses are narrower.
Authorized agent misuse: If you truly authorized someone (SPA, email/letter, in-app delegation), you can be bound within the scope of that authority; otherwise, no.

5) Collateralized loans and pawns

Chattel/mortgage/pawn: The lender may repossess or foreclose the collateral on default, but cannot harass or seize unrelated property. Surplus/deficiency rules depend on contract and auction results. If the underlying loan is void (identity theft), challenge the lien.

Part II — What to Do if a Loan Was Taken in Your Name

1) Immediate (first 24–72 hours)

Freeze and alert
- Call the lender’s fraud desk and file a written dispute. Ask for an account freeze, transaction logs, and stop-collection while under investigation.
- Notify your bank/e-wallet; change PINs; lock your SIM; enable 2FA everywhere.
Report the crime
- File with PNP Anti-Cybercrime Group or NBI Cybercrime Division. Get a case referral number.
- Make a sworn statement (affidavit of identity theft/forgery). Attach evidence.
Preserve evidence
- Keep screenshots of phishing/chats/calls, call logs, SMS, emails, and app notices.
- Request telco event logs (SIM-swap/porting) and phone location history, if any.

2) Within 7–14 days

Formal dispute package to the lender: Cover letter + affidavit + police/NBI report + timeline + device/telco records + proof of non-receipt of proceeds + specimen signatures + ID copies. Demand suspension of collection, removal from negative listing, and written findings.
Credit report checks and corrections: Request your file from the Credit Information Corporation (CIC) and private bureaus (e.g., TransUnion, CIBI). File a dispute for any erroneous trade lines.
Data privacy complaint (if your contacts were scraped or data misused): Prepare a complaint for the National Privacy Commission (NPC) if collectors messaged your phonebook, publicized your debt, or processed your data without a lawful basis.
Consider a notarized “Cease and Desist” letter to collectors (see model below).

3) If the lender sues you

Do not ignore summons. File an Answer raising affirmative defenses: no consent, forgery, no privity, no delivery, fraud, privacy violations, spoliation if logs were withheld.
Move for discovery: original documents, audit trails, e-KYC footage, server logs, call recordings, and chain-of-custody of evidence.
If amount qualifies, the lender may file a Small Claims case; defenses still apply (you can’t be ordered to pay a debt you never agreed to).

Part III — Harassment and Unfair Debt Collection: What is (Not) Allowed

1) Prohibited practices (illustrative, not exhaustive)

Shaming tactics: Posting your face/name as “delinquent” on social media, group chats, or contacting your phonebook or co-workers.
Threats, coercion, or intimidation: Threats of arrest, criminal cases without basis, or physical harm.
Obscene or abusive language; repeated calls at odd hours; calling your employer after being told to stop.
False representations: Posing as a lawyer, prosecutor, or “court sheriff,” or implying final judgments exist.
Data privacy violations: Processing or disclosing your personal data without lawful basis or beyond what’s necessary to collect a legitimate, valid debt.

Even when a debt is valid, collectors must follow fair collection standards: identify themselves, state the true amount, and communicate during reasonable hours using lawful channels.

2) Where and how to complain

Securities and Exchange Commission (SEC): For lending and financing companies and their third-party collectors (esp. online lending apps).
Bangko Sentral ng Pilipinas (BSP): For banks, EMIs/e-wallets, credit cards, and BSP-supervised institutions.
National Privacy Commission (NPC): For unauthorized data processing/disclosure (e.g., contacting your phonebook).
PNP/NBI: For grave threats, coercion, libel/cyber libel, illegal access, and other crimes.
Local authorities / Barangay: For initial interventions/record of harassment.
Courts: For damages, injunctions, and to challenge illegal collections.

3) Practical tools

Cease-and-Desist (C&D) Notice: Direct it to the lender and all agents. Demand they: (a) stop contacting third parties; (b) limit calls to your chosen channel/day/time; (c) preserve and furnish their collection logs; (d) acknowledge the dispute status.
Demand for documents: Request the original contract, e-KYC capture, device/OTP logs, statement of account, and assignment documents if a collector claims to own the debt.
Damages claim: For mental anguish, besmirched reputation, and privacy breaches if harassment caused injury.
Evidence discipline: Record call dates/durations (and, where lawful, contents), keep envelopes, SMS headers, and screenshots. Maintain a contact log.

Part IV — Model Language You Can Adapt

Dispute & Fraud Affidavit (extract) “I, [Name], of legal age, Filipino, state that I did not apply for nor consent to Loan No. [____] allegedly granted by [Lender] on [date]. My signature/e-consent was forged/fraudulently obtained. I did not receive loan proceeds. On [date], I reported the incident to [PNP/NBI Case No. ___]. Attached are [SIM-swap report/device theft report/screenshots]. I request immediate account freeze, investigation, and removal of negative credit reporting pending resolution…”

Cease-and-Desist to Collectors (extract) “This is to demand that you cease contacting my relatives, employer, and other third parties and refrain from shaming tactics. Limit any necessary communications to [email/number] on weekdays 9:00–17:00 only. Provide within 5 days (1) the original loan contract/e-KYC and OTP logs, (2) your legal basis to process my data, and (3) proof of your authority to collect. Continued harassment will be reported to SEC/BSP/NPC and law enforcement and may give rise to civil and criminal liability.”

Part V — Evidence & Burden of Proof: How Cases Are Won

Lender’s burden: Authentic loan documentation; proper identification; delivery of proceeds to you; and accurate ledgering.
Your rebuttal:
- Signature/biometrics denial backed by specimen signatures and expert comparison (if needed).
- Digital trail inconsistencies: IP in another city/country; device model/OS that isn’t yours; OTP delivered when your SIM was inactive; timestamps while you were provably elsewhere.
- No benefit rule: No funds reached you/your accounts; “benefit to impostor” breaks causation.
Comparative fault: If both sides were careless, a court may allocate losses; you aim to show the lender’s KYC and anti-fraud lapses were the proximate cause.

Part VI — Credit Reporting & Rehabilitation

Pull your reports: CIC + private bureaus.
File a written dispute: Identify the tradeline, attach your fraud documents; ask for re-investigation and temporary suppression while under review.
Get lender’s written clearance after they find fraud; submit it to the bureaus.
Build positive history: Use a secured card or small, fully repaid product to rebuild scores once the fraud item is removed.

Part VII — Frequently Asked Questions

Q1: The app used my selfie and ID. Am I doomed? No. Liveness checks and KYC can be spoofed. Challenge with contrary timestamps, device logs, telco evidence, and expert affidavits.

Q2: I repaid a few installments before realizing the fraud. That can look like ratification. Explain why you paid (duress, harassment, mistaken belief it was another account) and stop after filing the dispute.

Q3: Collectors keep calling my boss. Send a C&D identifying a single permitted contact channel and time window. Log and report each violation to SEC/NPC and, where threatening, to law enforcement.

Q4: Can they have me arrested for non-payment? No for pure civil debt. Arrest requires a crime (e.g., fraud, estafa). If you’re a fraud victim, document it and file reports.

Q5: Should I change my SIM? Yes—after you’ve received case numbers and set up forwarding/port-out blocks. Keep the old SIM off but retained to receive OTPs for account recovery if needed.

Part VIII — Practical Checklist

Freeze/dispute with lender; request stop-collection.
File PNP/NBI report; get case number.
Notify bank/e-wallet; change credentials; SIM lock/replace.
Compile evidence timeline; notarize affidavits.
Send C&D to collectors; set communication window.
Pull and dispute CIC/credit-bureau entries.
File NPC complaint if contacts were harassed/disclosed.
Keep a contact log and evidence binder.
Respond to any court summons on time.

Part IX — When to Involve Counsel

High amounts, collateral at risk, or you’ve been sued.
Complex digital forensics (device cloning/SIM-swap).
Repeated privacy violations and reputational harm (consider damages and injunction).

Final Notes

A lender’s KYC and fraud controls are not your burden; if those fail and you did not consent, you can defeat liability.
Harassment is never necessary to collect even valid debts and may itself create regulatory and civil exposure for the collector.
Your strongest assets are speed, documentation, and consistency.