The rise of Financial Technology (FinTech) in the Philippines has made credit more accessible to the unbanked through Online Lending Applications (OLAs). However, this convenience often comes with a dark side: predatory lending practices, harassment, and public shaming.
If you or someone you know is being threatened, shamed on social media, or harassed by an OLA, it is crucial to know that the law is on your side.
Common Illegal Practices by OLAs
Many unregistered or unscrupulous OLAs employ "debt collection" tactics that violate Philippine laws and SEC regulations. These include:
- Accessing Contact Lists: Forcing users to allow access to their phone contacts and then messaging everyone on that list about the user’s debt.
- Public Shaming: Posting the borrower’s face, ID, or "wanted" posters on social media (Facebook groups, etc.) to coerce payment.
- Threats of Violence or Death: Sending messages threatening physical harm to the borrower or their family.
- Profane and Abusive Language: Using insults and derogatory terms during calls or via SMS.
- False Claims of Legal Action: Threatening immediate imprisonment or claiming a "sheriff" is on their way to the borrower's house (which is legally impossible without a court order).
Legal Framework: Laws Violated
The following laws and regulations protect Filipinos from these abusive practices:
1. SEC Memorandum Circular No. 18 (Series of 2019)
The Securities and Exchange Commission (SEC) explicitly prohibits "unfair debt collection practices," including:
- The use or threat of violence.
- Use of obscenities or insults.
- Disclosure of the borrower's name as a "delinquent" to the public.
- Contacting people in the borrower's contact list who are not co-makers or guarantors.
2. Republic Act No. 10173 (Data Privacy Act of 2012)
Accessing a phone’s contact list and using that information to harass third parties is a major violation of data privacy. The National Privacy Commission (NPC) has issued several orders cease-and-desist orders against OLAs for this reason.
3. Cybercrime Prevention Act of 2012 (R.A. 10175)
Public shaming on social media can be classified as Cyber Libel. Additionally, computer-related identity theft or unauthorized access to data falls under this law.
4. Revised Penal Code (RPC)
- Grave or Light Threats: If the collector threatens to harm you or your property.
- Grave or Light Coercion: If they force you to do something against your will (like paying more than what is legally owed) through intimidation.
- Unjust Vexation: A broad category for any conduct that causes annoyance, irritation, or distress.
Legal Remedies and Action Steps
If you are a victim, do not delete the evidence. Follow these steps:
- Document Everything: Take screenshots of all threatening messages, public posts, and call logs. Save the phone numbers and names of the agents.
- Verify the OLA: Check the SEC website to see if the lending company is a Registered Corporation and has a Certificate of Authority (CA) to operate as a lending/financing company. Many harassers work for "fly-by-night" apps without CAs.
- Cease Communication: Once you have documented the harassment, you are not legally obligated to endure verbal abuse. You can inform them that you will only communicate through formal, legal channels.
Where to Report
| Agency | Focus Area | How to Reach Out |
|---|---|---|
| Securities and Exchange Commission (SEC) | Violations of lending regulations and lack of license. | Email: cgfd_enforcement@sec.gov.ph or visit the SEC i-Message portal. |
| National Privacy Commission (NPC) | Unauthorized access to contacts and data privacy breaches. | Website: privacy.gov.ph (Complaints section). |
| PNP Anti-Cybercrime Group (PNP-ACG) | Cyber-libel, online threats, and harassment. | Visit the nearest PNP-ACG district office or report via their Facebook page. |
| NBI Cybercrime Division | Investigating digital crimes and identity theft. | Visit the NBI Headquarters (Manila) or their regional offices. |
Important Note on Debt
While the law protects you from harassment, it does not automatically extinguish your civil obligation to pay the principal amount borrowed. However, illegal interest rates and "processing fees" can be contested in court if they are found to be "unconscionable" or "usurious" under Philippine jurisprudence.
Pro-Tip: If you are being shamed on Facebook, report the post/account to Facebook immediately for "Harassment" or "Bullying" to have the content removed while your legal case is pending.
Would you like me to draft a formal Demand Letter or a Notice to Cease and Desist that you can send to a lending company's customer service or legal department?