Recovery of Overpayment from an Online Lending App (Philippine context)

This guide explains why overpayments happen with online lenders, your legal bases to get money back, step-by-step remedies (from demand, to regulators, to court), what to prepare, how to compute the amount due (including interest on refunds), and special situations (illegal apps, harassment, data privacy). It’s written for borrowers dealing with Philippine-based lending companies and apps, whether the loan is still active or already closed.

1) When is there an “overpayment”?

Common causes:

System or posting errors (double debits, auto-debit glitches, weekend/holiday duplicate postings).
Wrong allocation (your payment applied to fees that shouldn’t exist; or to interest already waived; or to another person’s account).
Forced add-ons (insurance, processing fees) not in your signed disclosures.
Early settlement miscomputations (failure to recompute interest/fees up to payoff date; charging future interest).
Rollover/refinance mistakes (previous loan fully paid, yet the app continued collecting).
Rounding/FX errors (for apps collecting in PHP but quoting in USD; or platform fees accidentally included).

Key checks: Compare the promised schedule vs. ledger, verify the contract rate, look for fees not in the contract, and spot posting dates that produced duplicate collections.

2) Legal bases for getting your money back

Civil Code – solutio indebiti / unjust enrichment. If you paid by mistake or the lender received more than what is due, they must return it.
Civil Code – obligations & payments. Payments first go to interest then principal unless you validly direct otherwise; once the obligation is fully extinguished, any excess is refundable.
Truth in Lending principles (disclosure). Undisclosed finance charges and hidden add-ons cannot be sprung after the fact; over-collections tied to non-disclosed items are recoverable.
Financial Consumer Protection framework. Financial service providers must have fair, timely complaint handling and correct erroneous postings/charges; refusal to correct may invite regulatory action.
Data Privacy and anti-harassment rules. If an app uses shaming/contacts scraping while you’ve already overpaid, that’s a separate violation you can complain about (see §9).

Prescription: Actions founded on quasi-contract (like solutio indebiti) generally prescribe in six (6) years from payment.

3) First question: is your loan still active?

Active loan: You can ask the lender to apply the excess to remaining principal/interest (confirm new balances in writing). If the excess zeroes out the loan, demand a closure letter and refund of any remaining surplus.
Closed loan: Demand a cash refund to your chosen account/e-wallet plus legal interest (see §6).

4) Evidence to gather (before you complain)

Contract pack: loan agreement, disclosure statement, fee schedule, app T&Cs.
Official ledger: statements from the app, including posting dates & OR/transaction IDs.
Payment proofs: bank/e-wallet receipts, screenshots, SMS, emails.
Computation sheet: what should have been collected vs. what was actually collected (see §6).
Timeline: when you demanded a fix and any replies (ticket numbers).
Identity & account details: full name, registered mobile/email, loan/account number.

5) Step-by-step remedies (escalate in this order)

A) Write a formal demand to the lender (in-app + email)

Ask for: (i) reversal/refund; (ii) corrected ledger; (iii) no-harassment hold while the dispute is pending; and (iv) closure letter if paid in full.

Attach your computation, receipts, and screenshots. Give a clear deadline (e.g., 10–15 days). Send through the in-app help, the registered support email, and (if available) their registered office address by courier.

B) Payment channel reversal (if duplicate/erroneous posts)

If the overpayment was a bank/e-wallet duplicate charge (insta-debit, auto-debit, card rail):

File a chargeback/reversal request with your bank/e-wallet immediately, with receipts and the lender’s ticket reference.
Ask the lender to issue a merchant credit while your bank processes the dispute.

C) Regulatory complaints (in parallel if stonewalled)

Depending on who supervises the entity:

SEC-registered lending/financing companies and their online apps: complain to the Securities and Exchange Commission (for unfair collection, undisclosed charges, refusal to refund, unregistered/illegal app issues).
BSP-supervised banks/e-money issuers/payment channels involved in the debit: file with the BSP for the payment error; keep it separate from the SEC complaint about the lender if the lender is non-bank.
National Privacy Commission (NPC): if there’s contact list harvesting, shaming, or data misuse during/after your overpayment dispute.

Tip: You can pursue both merchant-side (lender) and payment-rail (bank/e-wallet) fixes when the error straddles both.

D) Small claims case (no lawyer required)

If the lender refuses or delays refund:

File a Small Claims action in the first-level court (MTC/MeTC/MCTC). The cap currently covers most consumer-size disputes.
KP/Barangay conciliation is not required when the defendant is a corporation/company (lending app entity).
Reliefs: refund of the overpayment plus 6% legal interest, damages (if allowed), and costs. Bring your computation, ledger, and demand letters.

6) How to compute what’s owed (and interest)

A) Determine the correct amount due

Start with principal and contracted interest up to the payment date.
Remove charges not in your contract or those already waived/reversed.
If you fully prepaid, recompute interest only up to payoff date (no future interest).
If payments were misapplied, re-apply to interest first, then principal unless you had a valid designation in writing.

B) Compute the excess

Excess = Total actually paid – Correct amount due

C) Add legal interest (on the excess)

Use 6% per annum (simple) from the date of your written demand (or from each erroneous debit if you can track it) until fully refunded.

D) Ask for fees back tied to the error

Reversal of late fees/penalties triggered by the app’s misposting.
Reimbursement of transfer fees you incurred to correct the app’s error.

7) Practical templates

A) Short demand letter (adapt to your facts)

Subject: Demand for Refund of Overpayment and Correction of Ledger – [Loan/App ID] Dear [Lender], I discovered an overpayment on my account [Loan ID] due to [duplicate debit / wrong allocation / early payoff miscompute]. Summary: – Correct amount due as of [date]: ₱[amount] – Total collected by you: ₱[amount] – Excess paid: ₱[amount] (see attached computation and receipts). I demand: (1) refund of ₱[excess] to [bank/e-wallet details] within [10] days, plus 6% legal interest from [demand date] until paid; (2) a corrected ledger/closure letter; and (3) no collection/harassment while this is resolved. Failing which, I will elevate this to regulators and file a Small Claims case. Sincerely, [Name, mobile, email] Attachments: computation; ledger; receipts/screenshots; valid ID.

B) Computation table (what to attach)

Columns: Date, Description, Amount paid, Correct charge, Over/(Under), Running excess, Reference/OR.

8) Special situations

Loan sold to a third-party collector. Notify both the app and the assignee; cite your overpayment and demand they cease collection and issue a corrected balance/closure.
Refinance/“Top-up” that secretly paid the old loan. Trace the net cash disbursed vs. what was booked as “new principal.” Over-nets are recoverable.
Illegal/Unregistered lending app. You may still recover from the operators (civilly) and report them for administrative/criminal action (e.g., unfair collection, data privacy violations). Keep screenshots of the app page, payment accounts, and any correspondence.
Harassment/shaming while disputing. Save call recordings, messages, and contact-blast screenshots; these support separate complaints and damages.
Paid via employer salary deduction. Ask HR/payroll for remittance logs; if the lender already received the funds but keeps collecting, direct HR to suspend deductions and confirm the refund route.

9) What regulators generally look for

Are you dealing with a registered lending/financing company?
Did the company disclose all finance charges and post payments correctly?
Did it handle your complaint via an internal dispute process and correct the error?
Are there signs of unfair collection (threats, shaming, excessive calls, contacting people in your phonebook)?
Any data privacy misuse (unauthorized contact scraping, disclosure to your contacts)?

Having a clean paper trail (tickets, emails, screenshots) speeds things up.

10) FAQs

Q: Can the lender just keep the excess and apply it to future loans? A: No, not without your clear consent. For an active loan, they may apply excess to that loan; otherwise, you can demand a refund.

Q: Do I need to go to the barangay first? A: No. KP conciliation doesn’t apply because the lender is a juridical person; file with the court directly if needed.

Q: What if I can’t get the ledger? A: Use your receipts and bank/e-wallet statements to build the computation; demand the ledger; note the refusal in your complaint.

Q: Can I claim damages for stress and time lost? A: You can pray for damages; whether granted (and how much) depends on proof of bad faith/harassment and the court’s discretion.

Q: How long do I have to file? A: Generally six (6) years from payment for solutio indebiti-type claims. File sooner—interest runs from demand, and evidence is fresher.

11) Clean wrap-up checklist

Get contract, ledger, receipts
Prepare computation (excess + 6% p.a. interest)
Send formal demand (multi-channel)
Try bank/e-wallet reversal if applicable
Escalate to regulators (lender + payment rail + privacy if needed)
If unpaid, file Small Claims for refund + interest + costs
After refund, request closure letter and updated credit report (if any)

Bottom line

If an online lender took more than what’s due, you’re legally entitled to a refund—often with 6% interest from demand—under principles of mistaken payment and unjust enrichment, plus consumer-protection norms. Move fast: document, demand, escalate, and, if needed, sue via Small Claims. Keep harassment and data-misuse issues on a separate track for added leverage and accountability.