The rise of Financial Technology (FinTech) in the Philippines has provided millions with quick access to credit. However, this convenience has a dark side: a surge in unethical and illegal debt collection practices by certain Online Lending Apps (OLAs). For borrowers struggling with past-due loans, the "convenience" often transforms into a nightmare of systemic harassment.
Under Philippine law, being a debtor is not a crime, but the methods used by many OLAs certainly are.
I. Common Forms of OLA Harassment
Harassment usually begins the moment a payment is missed (and sometimes even before). Common tactics include:
- Debt Shaming: Contacting people in the borrower’s contact list (family, friends, employers) to inform them of the debt.
- Identity Theft/Misuse: Using the borrower's photos or IDs to create "Wanted" posters on social media.
- Threats of Violence or Arrest: Falsely claiming that the police are on their way or that a warrant of arrest has been issued (Note: In the Philippines, there is no imprisonment for non-payment of debt under the Constitution, unless fraud/Estafa is involved).
- Persistent Incessant Calling: Calling at ungodly hours or using automated bots to flood a borrower’s phone with hundreds of messages.
II. The Legal Framework: Your Protections
Several laws and regulations protect Filipinos from these predatory practices:
- SEC Memorandum Circular No. 18 (Series of 2019): This is the primary regulation governing debt collection. It explicitly prohibits:
- The use or threat of violence.
- Use of profane or abusive language.
- Disclosure of the borrower's name as a "delinquent" to the public.
- Contacting the borrower at unreasonable hours (before 6:00 AM or after 10:00 PM).
- Republic Act No. 10173 (Data Privacy Act of 2012): Most OLAs require "Contact List" access. Using this data to contact third parties about your debt is a massive violation of data privacy, punishable by imprisonment and heavy fines.
- The Revised Penal Code & Cybercrime Prevention Act: Actions such as "Wanted" posters or public shaming may constitute Libel or Cyber Libel. Threats can be classified as Grave or Light Threats or Coercion.
- Article III, Section 20 of the 1987 Constitution: "No person shall be imprisoned for debt or non-payment of a poll tax."
III. Remedial Steps: How to Fight Back
If you are a victim of OLA harassment, you should take the following steps immediately:
1. Document Everything
Collect evidence. Screenshots are your best weapon. Save copies of:
- Threatening text messages and call logs.
- Social media posts or messages sent to your contacts.
- The "Terms and Conditions" of the app (if still accessible).
2. File a Complaint with the SEC
The Securities and Exchange Commission (SEC) is the primary regulator of lending companies. You can file a formal complaint through their Corporate Governance and Finance Department (CGFD).
- Requirement: Ensure the OLA is registered. If they are not registered, they are operating illegally.
3. Report to the National Privacy Commission (NPC)
If the OLA contacted your friends or family without consent, file a "Privacy Complaint" with the NPC. They have the power to shut down apps and recommend criminal prosecution for data privacy violations.
4. Coordinate with the PNP-ACG or NBI
For threats, extortion, or cyber libel, visit the Philippine National Police - Anti-Cybercrime Group (PNP-ACG) or the National Bureau of Investigation (NBI) Cybercrime Division.
IV. Summary of Legal Remedies
| Violation | Relevant Law | Agency to Contact |
|---|---|---|
| Unfair Collection Practices | SEC MC No. 18 | SEC |
| Accessing/Using Contacts | Data Privacy Act | NPC |
| Cyber Libel / Threats | Cybercrime Law | PNP-ACG / NBI |
| Illegal Interest Rates | Truth in Lending Act | SEC |
Conclusion
Debt is a civil obligation, not a surrender of your human dignity. While borrowers are encouraged to settle their legitimate obligations, OLAs are strictly prohibited from using "scorched earth" tactics to enforce collection. By exercising your rights and filing formal complaints, you not only protect yourself but also contribute to the crackdown on digital predatory lending.
Would you like me to draft a formal demand letter to an OLA or a template for a complaint to the SEC?