Report Excessive Interest by Online Lenders (Philippines, SEC)

A complete, practical legal guide—Philippine context, no browsing

1) Big picture: who’s in charge and what “excessive” means

Regulator: Online lending to the public (non-banks) is under the Securities and Exchange Commission (SEC)—specifically the laws on Lending Companies (R.A. 9474) and Financing Companies (R.A. 8556, as amended), plus the Financial Products and Services Consumer Protection Act (FCPA, R.A. 11765).
Truth in Lending (R.A. 3765): Lenders must clearly disclose the total finance charge and the effective interest rate before you borrow. Hidden or after-the-fact fees violate this.
Usury ceilings: The old statutory caps are suspended; however, courts and regulators strike down “unconscionable” rates and junk fees and can order refunds, contract reformation, penalties, and other relief.
Unlicensed apps: Lending “to the public” without an SEC Certificate of Authority (CA) is illegal. Unlicensed + excessive interest = double trouble.

Practical rule: Even without a hard cap, undisclosed or unreasonable interest/fees—especially when net proceeds are heavily shaved by “processing”/“service”/“doc” fees—are attackable as unfair, deceptive, or abusive acts and unconscionable interest.

2) What counts as excessive (red flags)

Interest quoted per day (e.g., “2–10%/day”) or per “cycle” without annualization.
Large upfront deductions (processing/transfer/verification fees) that slash net proceeds, inflating the effective rate.
Double charging: interest and penalties and “collection” fees stacked simultaneously, compounded informally.
Hidden charges not in the pre-contract disclosure/loan agreement.
Short-tenor rollovers that force frequent “renewals,” each with new fees.
Mismatched payee (you pay “ABC Trading” for a loan from “XYZ Lending”), or no official receipt under the licensed corporate name.

3) Compute the effective rate (what the SEC will look at)

When you repay ₱X in N days but received only net proceeds, your effective annual rate explodes. Show this in your complaint.

Example:

“Loan amount” ₱10,000
“Processing fee” ₱1,500 (deducted upfront) → cash received ₱8,500
Tenor 14 days, repayment ₱11,200 (includes interest + “service” fee)

Cost of credit (14 days) = ₱11,200 − ₱8,500 = ₱2,700 14-day simple rate on net = 2,700 / 8,500 = 31.76% Approx. annualized ≈ 31.76% × (365/14) ≈ 828% p.a. (even higher if there are penalties/rollovers)

Always compute on net cash received, not the paper “loan amount.” Attach your math.

4) Evidence pack (what to gather before you report)

Screenshots/PDFs of the app listing, pre-contract pages, disclosure screens, and the loan agreement.
Receipts (e-wallet/bank), showing payee name and reference numbers.
Ledger or in-app history: amount “approved,” fees deducted, due dates, penalties.
Communications (texts, chat, email), especially promises vs. actual charges.
Corporate identity used in receipts/GCash names vs. the name in the contract/app store.
If harassed: contact-shaming messages, threats, group chats (see Data Privacy note in §10).

5) Where and how to complain (SEC-focused, plus allied routes)

A) SEC (primary for online lending)

Grounds you can cite:

Operating without an SEC Certificate of Authority (if applicable).
Unfair/Deceptive/Abusive acts under FCPA: hidden fees, bait-and-switch rates, misleading disclosures.
Truth in Lending violations: failure to disclose finance charge/effective interest rate before contracting.
Abusive collection (if present): threats, lies, impersonation.

What to submit:

Identity (ID), contact info.
Lender/app names, any SEC Reg/CA no. (or state “unknown”).
Timeline and computation of effective rate (see §3).
Evidence pack (see §4) labeled and paginated.
Relief sought: stop order, penalties, refund of illegal/undisclosed charges, correction of records.

B) Small Claims Court (civil recovery up to ₱1,000,000)

Sue for refund of illegal charges, damages, and interest re-computation. Attach your computations and evidence.

C) National Privacy Commission (if they scraped/used your contacts)

Debt-shaming and contact scraping violate the Data Privacy Act—seek cease-and-desist, deletion, and fines.

D) PNP-ACG / NBI Cybercrime (if there are threats, extortion, libel)

File criminal complaints for grave threats, grave coercion, (cyber) libel, extortion, etc.

These tracks can run in parallel.

6) Step-by-step: SEC complaint workflow

Draft your narrative (1–2 pages): who you dealt with, what was promised vs. what happened, dates, and how the fees/interest were applied.
Attach your computations (APR/effective rate) and supporting documents.
Identify the entity: the exact app name, in-app legal name, and the payee name on receipts. If you can’t confirm the CA, state “CA not shown / identity unclear.”
State the laws breached (short bullets): R.A. 11765 (FCPA—UDAAP), R.A. 3765 (Truth in Lending), R.A. 9474/8556 (licensing), and unconscionable interest doctrine.
Ask for relief: cease-and-desist; order to refund/credit unlawful charges; administrative fines; referral for prosecution; disclosure of licensed corporate identity.
Keep a copy and your filing acknowledgment. Track your case/ticket number.

7) Demand letter (pre-complaint or parallel)

Subject: Demand to Rectify Unlawful Interest/Fees – [Your Name, Loan/Ref No.] I agreed to a ₱[amount] loan on [date]. You deducted ₱[fees] upfront and required repayment of ₱[total] after [days], yielding an effective rate of ~[APR]% p.a. based on net proceeds, with [list hidden/duplicative fees] not disclosed as required by R.A. 3765. These terms are unconscionable and unfair/deceptive under R.A. 11765. Demands (5 days): (1) Recompute to lawful terms (principal + reasonable interest); (2) Remove/Refund undisclosed/duplicative charges; (3) Provide your SEC Certificate of Authority and corporate payee details; (4) Cease abusive collection. Absent compliance, I will file with the SEC, and pursue civil/criminal remedies.

8) If you already paid—recovering illegal charges

Ask for a transaction history/ledger and compute principal actually received vs. total paid.
Demand refund of the excess (undisclosed fees, extortionate penalties).
If refused, file Small Claims (attach your math) and flag the case to SEC to support your claim of systemic abuse.

9) Defending yourself if they sue you first

Plead unconscionable interest and Truth in Lending violations; ask the court to strike illegal charges, reduce interest to a reasonable rate, and recompute on net proceeds.
If they’re unlicensed or the corporate identity is inconsistent, raise lack of authority and defective standing.
If there was harassment (contact shaming), counterclaim for damages under the Data Privacy Act and Civil Code.

10) Harassment & privacy (often bundled with excessive interest)

Debt-shaming (messaging your contacts, employers, schools) = unlawful data processing. File with NPC for cease-and-desist and deletion; add this to your SEC complaint as abusive collection.
Do not send IDs/selfies to random collectors; insist on a corporate email and official receipts indicating the licensed corporate name/TIN.

11) Clean borrowing checklist (so this doesn’t happen again)

Verify licensing: Ask for the lender’s SEC Certificate of Authority (CA) and match it to the payee name.
Demand pre-contract disclosures: total finance charge and effective annual rate.
Refuse all-or-nothing consent to contacts/photos—this is invalid consent.
Borrow only what you can repay in full on the first due date; avoid serial rollovers.
Keep a personal worksheet of net proceeds, fees, and APR.

12) Quick templates (copy, edit)

A) SEC Complaint (outline)

Complainant: [Name, Address, ID] Respondent: [App/Lender], in-app legal name (if any), payee names on receipts Facts: Dates, amounts, fees deducted, due/paid amounts, tenor; attach screenshots and receipts Violations: R.A. 11765 (unfair/deceptive), R.A. 3765 (undisclosed finance charge/EIR), R.A. 9474/8556 (no CA / misrepresentations), abusive collection (if any) Computation: Show net proceeds and APR (see §3) Relief: Cease-and-desist; refund/credit of illegal charges; penalties; disclosure of licensed entity; referral for prosecution

B) Small Claims – Statement of Claim (skeleton)

Defendant imposed undisclosed/duplicative fees and excessive interest resulting in an effective rate of ~[APR]% p.a. on net proceeds ₱[net]. I paid ₱[total]. I seek refund of ₱[excess] plus legal interest, and costs.

C) NPC Privacy Complaint (short)

Respondent scraped my contacts/photos and sent debt-shaming messages. This processing lacks lawful basis and violates data minimization/proportionality. I request cease-and-desist, deletion, and administrative penalties.

13) FAQs

Is there a legal cap on interest? No fixed ceiling today, but unconscionable rates/fees can be reduced or voided, and undisclosed charges are attackable.

Can I stop paying entirely if rates are abusive? You still owe principal (and reasonable interest). Dispute and recompute; pay what’s lawful. Use SEC/Small Claims if they won’t correct.

The app is foreign. Can SEC act? If it targets Philippine borrowers or processes data of PH residents, SEC may proceed; also pursue NPC and cybercrime remedies.

They refuse to issue receipts in the corporate name. Red flag. Include that in your SEC complaint; it supports misrepresentation and licensing issues.

14) Bottom line

Excessive interest + hidden fees are actionable as unfair/deceptive and unconscionable—even without a hard cap.
Compute the effective annual rate on net proceeds and document everything.
File with the SEC (primary), and use Small Claims for refunds and NPC/cybercrime for privacy/harassment issues.
Pay only lawful amounts through traceable channels; refuse junk fees and intimidation.

If you share your numbers (approved amount, net received, tenor, due, fees) and a few screenshots (redact personal info), I can compute your APR, draft a file-ready SEC complaint, and tailor your demand letter today.