The explosion of online lending applications in the Philippines since 2017 has provided millions of unbanked and underbanked Filipinos with instant access to credit. However, it has also created one of the most serious consumer protection crises in recent memory. Predatory lending platforms—many unregistered, foreign-operated, and deliberately designed to exploit desperation—have subjected borrowers to usurious interest rates reaching 30% per month or higher and brutal harassment tactics that include public shaming, death threats, morphed pornographic images, and mass messaging of entire contact lists.

This comprehensive article consolidates every major law, regulation, circular, jurisprudence, and remedy available to Filipino borrowers as of November 2025.

I. Regulatory Framework Governing Lending in the Philippines

Securities and Exchange Commission (SEC)
Primary regulator of lending companies and financing companies under Republic Act No. 9474 (Lending Company Regulation Act of 2007) and Republic Act No. 8556 (Financing Company Act of 1998).
Only entities with a Certificate of Authority (CA) from the SEC may legally engage in lending as a business.
Bangko Sentral ng Pilipinas (BSP)
Regulates banks, quasi-banks, trust entities, and their subsidiary non-bank financial institutions. Digital banks and operators of payment systems used by many lending apps also fall under BSP supervision.
Republic Act No. 11765 (Financial Products and Services Consumer Protection Act of 2022)
The single most important consumer protection law for borrowers today. It applies to all financial products and services, including online loans, and imposes strict standards of fairness, transparency, and accountability.
Republic Act No. 3765 (Truth in Lending Act)
Requires full disclosure of effective interest rate, finance charges, and total cost of credit before contract perfection.
Republic Act No. 10175 (Cybercrime Prevention Act of 2012)
Criminalizes online libel, identity theft, and computer-related offenses used in harassment.
Republic Act No. 10173 (Data Privacy Act of 2012)
Protects personal data collected by lending apps (contacts, photos, SMS, etc.).
Civil Code provisions on contracts, damages, and human relations (Arts. 19–21, 26, 32, 33, 34, 100, 1157, 1306, 1409, 2229–2234)
Revised Penal Code provisions on grave threats, grave coercion, unjust vexation, light threats, slander by deed, alarms and scandals

II. Excessive and Unconscionable Interest Rates

The Usury Law (Act No. 2655) was suspended by Central Bank Circular No. 905 in 1982, removing criminal liability for excessive interest. However, unconscionable rates remain challengeable.

Legal Standards on Interest Rates (2025)

Parties are free to stipulate interest rates (Art. 1306, Civil Code).
Rates that are “iniquitous, unconscionable, or exorbitant” may be reduced or nullified by courts (Medel v. CA, G.R. No. 131622, 1998; Chua v. Timan, G.R. No. 170452, 2008; Castro v. Tan, G.R. No. 168940, 2009).
Rates exceeding 3–6% per month (36–72% per annum) are routinely struck down as unconscionable in salary loans and micro-lending cases.
RA 11765 Sec. 10 explicitly prohibits “excessive, unconscionable, or exorbitant” fees or interest.
SEC Memorandum Circular No. 3, series of 2023 requires lending companies to cap effective interest rates at levels deemed reasonable by the SEC Market Regulation Department (current internal guideline: not exceeding 30% per annum for unsecured microloans, but courts remain the final arbiter).

Computation of Effective Interest Rate

The Supreme Court in GSIS v. CA (2017) and numerous subsequent cases mandates the use of the outstanding balance method, not the add-on or flat method commonly used by predatory apps. Many apps advertising “0.05% per day” actually charge effective rates of 300–900% per annum when penalties and processing fees are included.

Remedies Against Excessive Interest

File a complaint for declaration of nullity of interest clause and refund of excess payments (Civil Code Arts. 1410, 1420).
Administrative complaint with SEC for violation of RA 11765 and Truth in Lending Act → possible cease-and-desist order, fines up to ₱5,000,000, and revocation of CA.
Criminal complaint for violation of RA 3765 (imprisonment up to 6 months or fine up to ₱10,000) if there was deliberate non-disclosure.

III. Harassment and Unfair Debt Collection Practices

Prohibited Acts (Exhaustive List from SEC MC No. 18 s. 2019, MC No. 3 s. 2020, and RA 11765)

The following are expressly prohibited and carry administrative and criminal liability:

Using obscenities, insults, or profane language
Threatening violence, harm, or criminal prosecution
Threatening to disseminate photos or information to cause shame (“shaming”)
Contacting employers, relatives, friends, or any third party except for location verification (maximum 3 attempts)
Posting borrower’s photos or details on social media or “blacklists”
Creating and distributing morphed pornographic images
Calling or messaging between 10:00 p.m. and 6:00 a.m.
Calling more than three (3) times per week
Disclosing debt details to third parties without written consent
Using fake Supreme Court or NBI identities
Accusing borrower of estafa when no criminal intent exists
Accessing contacts, gallery, or SMS without explicit consent in the loan agreement (violates Data Privacy Act)

Landmark Cases on Harassment

People v. App (2023–2025): Multiple convictions of Chinese nationals running 5-6 and online lending harassment syndicates for grave threats, unjust vexation, and violation of RA 10175.
Disini v. Secretary of Justice (2014) and subsequent cases: Confirmed that online libel and cyber-harassment are punishable even by foreigners operating offshore if the victim is in the Philippines.
NPC Advisory Opinion No. 2022-045: Mass messaging of contacts constitutes serious personal information processing violation; fines up to ₱5,000,000 per violation.

IV. Borrower Rights (Consolidated)

Every borrower, whether dealing with a legitimate or predatory lender, has the following non-waivable rights:

Right to full disclosure of all charges before contract perfection (RA 3765)
Right to privacy of personal data (RA 10173)
Right to be free from abusive, oppressive, or unconscionable collection practices (RA 11765, SEC circulars)
Right to access correction or deletion of personal data
Right to file complaints without retaliation
Right to refund of overpayments and reduction of unconscionable interest
Right to be informed of SEC registration status of the lender
Right to moratorium or restructuring during calamities (Bayanihan Acts precedent continues in practice)

V. Complete List of Legal Remedies (Step-by-Step)

A. Immediate Actions (Within Hours/Days)

Send a formal demand letter via email and registered mail revoking access to contacts/gallery and demanding cessation of harassment.
File an online complaint with National Privacy Commission (privacy.gov.ph) for data privacy violation — usually resolved within 10–30 days with orders to delete data.
Report the app to Google Play Store and Apple App Store (most predatory apps are removed within 48 hours after mass reporting).

B. Administrative Remedies (Fastest and Most Effective)

SEC Consumer Assistance and Protection Division
Online complaint: sec.gov.ph → File a Complaint
Possible outcomes: CDO, fines, revocation of CA, public warning, coordinated takedown with NTC/DICT.
Processing time: 15–60 days.
BSP Financial Consumer Protection Department
If the lender is a bank subsidiary or digital bank (e.g., Maya Bank, CIMB, SeaBank).
Email: consumeraffairs@bsp.gov.ph
National Privacy Commission
For data privacy violations — highest success rate for forcing apps to delete all borrower data.

C. Criminal Complaints (For Serious Harassment)

File directly with the city/provincial prosecutor (in-person or via e-subpoena system):

Grave threats (Art. 282 RPC) — if death or harm threatened
Light threats (Art. 283)
Grave coercion (Art. 286)
Unjust vexation (Art. 287)
Slander by deed (Art. 359)
Cyberlibel (RA 10175)
Violation of RA 10173 (Data Privacy) — now with criminal penalties up to 7 years imprisonment
Usury (if lender is unlicensed and charges exorbitant rates — some courts still apply old Usury Law to illegal lenders)

The PNP Anti-Cybercrime Group (PNP-ACG) accepts online reports at acg.pnp.gov.ph and conducts raids within days if sufficient evidence is presented.

D. Civil Action for Damages (Most Lucrative)

File in Regional Trial Court:

Damages for violation of privacy and dignity (Arts. 26 & 32 Civil Code) — ₱100,000–₱1,000,000 moral damages common
Abuse of rights (Art. 19)
Breach of contract with damages
Unconscionable contract (Art. 1306, 1409)
Exemplary damages (Art. 2229–2234)

Notable awards:

₱500,000 moral + ₱300,000 exemplary (2023 Quezon City RTC case against Nice Lending)
₱1,000,000 moral damages (2024 Pasig RTC vs. multiple apps)

E. Class Action or Strategic Litigation

Several law firms and NGOs (FLAG, NUPL, Center for Trade Union and Human Rights) now handle online lending harassment cases pro bono or on contingency.

VI. Preventive Measures Every Borrower Must Take

Check SEC list of registered lending/financing companies at sec.gov.ph/registered-lending-companies
Never grant access to contacts, gallery, SMS, or location
Screenshot the loan agreement and disclosure statement
Record all harassment messages/calls
Use virtual numbers or secondary phones for loan applications
Report suspicious apps immediately to SEC and NPC

Conclusion

The Philippines now possesses one of the strongest legal frameworks in Southeast Asia for protecting online lending borrowers. RA 11765, combined with aggressive SEC enforcement, NPC sanctions, and increasingly borrower-friendly Supreme Court jurisprudence, has dramatically reduced the worst abuses since the peak crisis of 2020–2022.

Borrowers are no longer helpless. Every act of harassment, every unconscionable interest charge, and every unauthorized access to personal data is now actionable under multiple overlapping laws with severe penalties.

If you are currently being harassed or charged exorbitant interest, act immediately. File complaints with SEC, NPC, and the prosecutor simultaneously. The law is unequivocally on your side.