Online Lending Apps Charging Excessive Interest: How to File a Complaint with the SEC (Philippines)

This guide is written for borrowers in the Philippines dealing with abusive or overpriced loans from online lending apps (“OLPs”). It explains your rights, how to document the problem, and exactly how to file a complaint with the Securities and Exchange Commission (SEC). It’s general information, not legal advice.

TL;DR

Who regulates OLPs? The SEC regulates lending companies and financing companies, including those that operate via mobile apps or websites.
What counts as a violation? Examples include excessive or hidden interest/fees, misleading pricing, no proper disclosures, harassment/unfair collection, and operating without an SEC Certificate of Authority (CA).
What to do first: Collect evidence (contract, app screenshots, receipts, collection messages), compute the effective interest rate (EIR), and use the provider’s internal consumer assistance channel.
How to complain to the SEC: Prepare an Affidavit-Complaint + annexes, then file online or at an SEC office. Ask for relief such as refund of illegal charges, cease-and-desist, and administrative sanctions.
Parallel remedies: For data-privacy harassment (contacting your phonebook, doxxing), also complain to the National Privacy Commission (NPC); for threats/extortion, report to NBI/PNP.
No jail for non-payment of debt. (Criminal liability may arise only for fraud or other crimes; simple non-payment is civil.)

1) Legal Framework (Philippine Context)

Primary regulator: Securities and Exchange Commission (SEC) supervises lending companies and financing companies—including those that lend through mobile apps/websites.
Core statutes & rules (plain-English summary):
- Lending Company Regulation Act of 2007 (LCRA; R.A. 9474) and Financing Company Act (R.A. 8556): require registration and a Certificate of Authority (CA) before engaging in lending/financing.
- Financial Consumer Protection Act of 2022 (FCPA; R.A. 11765): affirms consumer rights (fair treatment, disclosure, privacy, redress) and empowers the SEC (and other financial regulators) to investigate, adjudicate certain disputes, and sanction providers.
- SEC rules on online lending (various memoranda/circulars): cover registration of OLPs, pricing transparency, and unfair debt collection (e.g., bans on harassment, public shaming, contacting your phonebook).
- Data Privacy Act of 2012 (R.A. 10173): the NPC can sanction apps that scrape/address-book blast, doxx, or misuse your personal data.
- Usury Law ceilings were long suspended, but courts may reduce “unconscionable” interest as contrary to law/morals; regulators may also cap or limit rates/fees by rule.
- 1987 Constitution, Art. III, Sec. 20: No imprisonment for non-payment of debt or poll tax.

Key takeaway: Even if “interest caps” are not absolute in every case, OLPs still must: (a) be SEC-authorized, (b) disclose true cost clearly, (c) avoid abusive collection, and (d) follow any rate/fee limits the SEC has issued. “Iniquitous” pricing can be struck down; undisclosed or junk fees are unlawful.

2) What Counts as “Excessive Interest” or Illegal Charges?

Look for these red flags:

Unregistered operation
- App/company has no SEC CA number; corporate name doesn’t match app branding; or it is on SEC public advisories/illegal lists.
Unclear or misleading pricing
- Ads say “0%” or “3%” but the app withholds processing/service fees upfront, so you receive less than you “borrow”—inflating the true rate.
Junk fees / stacking
- Duplicate “verification,” “convenience,” “fast disbursement,” or “system usage” fees, especially if deducted upfront and interest is still computed on the undiscounted principal.
Penalty overload
- High daily penalties, compounding on unpaid fees, or multiple penalties (late fee + per-day penalty + interest on penalties).
Short tenors with daily rates
- Daily “%” rates that explode the EIR/APR once fees and short terms are considered.
No proper disclosures / contract
- No clear schedule of fees, repayment calendar, cool-off/early settlement terms, or privacy notices.
Unfair collection practices
- Harassment, threats, contacting your phonebook, public shaming, defamatory posts, or coercive messages.

3) Compute Your Effective Interest Rate (EIR) (Simple Check)

Many OLPs quote low “interest,” but the true cost skyrockets when fees are withheld and tenors are short.

Step 1 — Amount actually received: Net Proceeds = Approved Amount − Upfront Fees
Step 2 — Total finance charge: Finance Charge = Interest + All Fees (incl. hidden/processing) + Insurance (if any)
Step 3 — Simple period rate: Period Rate = Finance Charge ÷ Net Proceeds
Step 4 — Approximate APR/EIR (annualized): EIR ≈ Period Rate × (365 ÷ Loan Days) (rough but revealing)

Example: Approved ₱5,000, fees/withholding ₱500, stated “interest” ₱500, tenor 10 days. Net Proceeds ₱4,000; Finance Charge ₱1,000 → Period Rate 25% → Approx. APR ≈ 912.5% p.a. This is the kind of math that helps the SEC see excessive or misleading pricing.

Tip: Attach your computation as an Annex to your complaint, with screenshots/receipts to back each figure.

4) Evidence Checklist

Collect and preserve (don’t delete the app until after you’ve kept copies):

Identity of the lender: corporate name, app name, developer/publisher name, website, physical address (if shown), SEC CA number (if shown).
Your loan documents: e-contract, disclosure statements, repayment schedule, ledger/transaction history, receipts.
Pricing proofs: screenshots showing stated interest, fees, amounts disbursed, deductions, and due dates.
Collection behavior: copies of texts, chats, emails, call logs/recordings (if you recorded), screenshots of harassment or messages to your contacts.
Privacy issues: app permission screens, evidence of contact scraping/doxxing.
Your computations: EIR/APR worksheet with dates and amounts.
Your ID and contact details for verification.

5) Pre-Complaint Steps (Recommended)

Identify the right regulator.
- SEC for lending/financing companies and OLPs.
- BSP if the lender is a bank or EMI (not typical for payday-style apps).
- NPC for data-privacy abuses.
Use the provider’s Consumer Assistance Mechanism (CAM).
- Under the FCPA, providers must have an internal complaints process with defined response timelines.
- Send a written complaint demanding: (a) itemized charges, (b) correction/refund, (c) stop to unfair collection. Keep proof of sending.
Secure your data and safety.
- Revoke app permissions (Contacts/SMS/Storage), change passwords, and inform family/contacts not to entertain collectors.
- If threatened with violence, report immediately to NBI/PNP and keep the threat messages.

You don’t have to do #2 first to go to the SEC (especially for urgent harassment), but it can help your case to show you asked the provider to fix it and they refused/ignored you.

6) How to File a Complaint with the SEC

A. What to file

Prepare an Affidavit-Complaint (signed; notarized if possible) with annexes:

Complainant details: full name, address, IDs, contact info.
Respondent details: corporate/app name(s), officers (if known).
Jurisdiction & basis: that respondent is a lending/financing company or operating as one; cite your loan/app transactions and the violations (excessive/hidden charges, unfair collection, unregistered operation, etc.).
Narrative of facts: dates, amounts, how the app priced and collected, and why the pricing is deceptive or unconscionable.
Legal grounds (plain): LCRA/Financing Company Act requirements; FCPA rights; SEC rules (pricing disclosure, unfair collection); Data Privacy Act if applicable; constitutional protection from imprisonment for debt.
Relief sought: refund/voiding of illegal charges; correction of account; cease-and-desist; suspension/revocation of CA; administrative fines; referral for criminal action if warranted.
Annexes: screenshots, contracts, receipts, harassment messages, EIR computation, proof of internal escalation (if any).

Formatting tip: Paginate annexes (Annex “A”, “B”, …) and reference them in your affidavit paragraphs.

B. Where and how to submit

You can file through any of the SEC’s accepted channels:

Online submission (SEC’s complaint/assistance channel).
- Fill in the intake form, upload your Affidavit-Complaint (PDF) and annexes (merge if required), and keep the ticket/reference number.
Email submission (where provided by the SEC for complaints/enforcement).
- Subject line: COMPLAINT vs. [App/Company] – Excessive Interest/Unfair Collection.
- Body: short summary; attach the affidavit and evidence.
In-person filing at the SEC Main or Extension Offices.
- Bring two (2) printed, signed copies of your affidavit and annex list, plus a USB or printed annexes if required.

Practical note: Exact inboxes, portals, and office counters can change. Use the SEC’s official website or call their helpdesk to confirm the current submission channel and any form templates before you file.

C. After you file—what to expect

Acknowledgment & docketing. You’ll receive a tracking/ticket number.
Initial evaluation. The SEC screens for jurisdiction and completeness; you may be asked for clarifications or more evidence.
Regulatory action. Depending on the case, the SEC may:
- Order the provider to explain (show-cause),
- Issue a cease-and-desist (especially for unregistered/abusive OLPs),
- Impose administrative sanctions (fines, CA suspension/revocation), and/or
- Refer for criminal prosecution where laws are violated.
Consumer redress. Under the FCPA and SEC powers, you can pursue refunds or adjustments of unlawful charges. Keep your communications responsive and timely.

7) Special Scenarios

A. The app is unregistered or uses a shell name

Say so in your affidavit and provide proof (e.g., mismatched corporate names, no CA number).
Ask the SEC to take down the app/website and penalize the operators.
Consider reporting to app stores using their “illegal/unsafe” report channels, attaching your SEC ticket.

B. Harassment and privacy violations

NPC complaint for: scraping your contacts, doxxing, blasting your employer/family, posting defamatory content using your data.
NBI/PNP for: threats, extortion, stalking, or cyber-libel. Attach the same annexes.

C. Debt collection threats of jail

Non-payment of debt (without fraud) is not a crime. Keep copies of threats; they bolster an unfair collection case.

8) Frequently Asked Questions

Do I need a lawyer? Not to file an SEC complaint. A lawyer can help if you also want to sue civilly for damages or defend a collection case.

Should I keep paying? Make informed decisions. Paying under protest may reduce harassment and mitigate penalties, but avoid signing waivers that forfeit your rights. If the SEC later orders a refund/adjustment, your payment record helps.

Can the SEC force a refund? The SEC can order corrective actions and impose sanctions; consumer redress is part of the FCPA regime. Remedies depend on the facts and evidence you provide.

How long will it take? It varies with case complexity, caseload, and responsiveness of the parties. Always keep your ticket number and respond promptly to SEC requests.

9) Templates You Can Re-Use

A. Affidavit-Complaint (sample outline)

AFFIDAVIT-COMPLAINT I, [Your Name], Filipino, of legal age, with address at [Address], after being duly sworn, state:

Parties. Respondent is [Corporate Name], operating the online lending app “[App Name]”.

Jurisdiction. Respondent is a lending/financing company (or operating as such) subject to the SEC.

Facts. On [date], I obtained Loan [Ref No.] for ₱[amount]. The app stated an interest of [x%] for [tenor] days. However, ₱[fees] were deducted upfront, and I received only ₱[net proceeds]. The ledger shows additional charges of ₱[breakdown].

Effective rate. Based on the attached computation (Annex “A”), my period rate is [x%] and the annualized EIR approximates [x% p.a.], far in excess of what was disclosed.

Unfair collection (if any). Starting [dates], Respondent/agents sent harassing messages and contacted my phonebook (Annex “B”).

Violations. These acts violate the LCRA/Financing Company Act, FCPA, and SEC rules on pricing disclosure and unfair debt collection.

Relief. I respectfully pray that the SEC:

Order Respondent to refund/void illegal charges and correct my account;

Issue appropriate cease-and-desist and administrative sanctions;

Refer the matter for criminal action if warranted; and

Grant other reliefs just and equitable.

[Signature over printed name] [Date] (Notarization block)

B. Email cover (if filing by email)

Subject: COMPLAINT vs. [App/Company]: Excessive Interest & Unfair Collection

Body (short):

I am filing an Affidavit-Complaint against [App/Company] for excessive/hidden interest, unfair collection, 
and violations of SEC rules. Please find attached my notarized Affidavit and annexes (A–E). 
My contact details are [number/email]. I request acknowledgment and a case/ticket number.

C. EIR one-pager (attach as Annex)

Loan ID & Dates
Approved Amount vs. Net Proceeds (after deductions)
Itemized Charges (interest, fees, insurance)
Tenor in days
Computation (as shown in Section 3)
Screenshots cross-referenced to each number

10) Practical Tips & Common Pitfalls

Keep everything in writing. Screen-record the app flow if possible.
Don’t delete the app (yet). Export or screenshot everything first.
Beware of “restructuring” traps that add new fees without reducing the rate.
Early payoff: Ask for a recomputed payoff net of unearned interest; keep proof if they refuse.
Don’t hand over more phone numbers; collectors sometimes fish for new contacts.
If you must pay under duress, write “Paid under protest—disputed charges” on the confirmation email/chat.

11) Where Else to Go (if relevant)

NPC — for contact scraping, doxxing, or data misuse.
NBI/PNP — for threats, extortion, stalking, cyber-libel.
BSP — if the lender is actually a bank/EMI masquerading as an OLP front-end.
Small Claims Court — for recovering modest sums (no lawyer needed; check current thresholds and rules).
Public Attorney’s Office (PAO) or IBP Legal Aid — for free/low-cost legal assistance if you qualify.

Final Notes

You have rights. Lenders must be authorized, transparent, and fair—especially online.
Excessive or hidden charges, and harassment, are actionable.
File with the SEC using a clear affidavit, solid evidence, and a simple EIR computation.
Consider parallel complaints (NPC; law enforcement) for privacy abuses or threats.

If you’d like, I can turn your facts and screenshots into a polished Affidavit-Complaint and an EIR annex you can file immediately.