Reporting High Interest and Harassment by Lending Apps in the Philippines

A practical legal guide for borrowers, advocates, and compliance officers

1) The landscape: who regulates what

Securities and Exchange Commission (SEC). Most lending apps are run by lending companies (R.A. 9474) or financing companies (R.A. 8556, as amended). The SEC registers, supervises, and can fine, suspend, or revoke these entities. It has issued rules prohibiting abusive debt collection and requiring proper disclosure when apps are used as online lending platforms.
Bangko Sentral ng Pilipinas (BSP). If the lender is a bank, thrift/rural bank, digital bank, or BSP-supervised non-bank financial institution, BSP’s consumer protection and disclosure rules apply (including card and BNPL-type products).
National Privacy Commission (NPC). Handles Data Privacy Act of 2012 (R.A. 10173) complaints—typical issues include contact scraping, unauthorized access to phone contacts/photos, and “shaming” of borrowers through mass texts or social-media posts.
Department of Justice (NBI-CCD) / PNP-ACG. For criminal conduct: threats, extortion, cyber libel, grave coercion, unjust vexation, identity theft, or computer-related offenses under the Cybercrime Prevention Act (R.A. 10175) and the Revised Penal Code.
Financial Consumer Protection Act (FCPA, R.A. 11765). Cross-cutting statute (2022) empowering BSP, SEC, and IC to enforce fair treatment, transparency, and redress, including restitution to consumers and administrative sanctions.

2) Interest, fees, and the “no usury” myth

The Philippines technically has no fixed usury ceiling (Central Bank Circular No. 905 lifted caps), but that does not mean “anything goes.”
Under the Civil Code (autonomy of contracts tempered by equity and public policy) and Supreme Court jurisprudence, courts may strike down or reduce “unconscionable” interest and charges. Decisions have voided exorbitant monthly rates and onerous penalty structures, particularly where borrowers had little real bargaining power or charges were hidden.
Truth in Lending Act (R.A. 3765). Lenders must clearly disclose the finance charge and the effective interest rate (not just a teaser monthly rate). Non-disclosure or misleading computation can be an unfair or deceptive practice and a basis for regulatory action and civil remedies.
Effective Interest 101. Many apps deduct a “processing fee” upfront then quote a low “monthly rate.” The effective rate is much higher because you pay interest on money you never actually received.
- Quick check: If you borrowed ₱10,000, the app deducted ₱1,000 as “fees” and you only received ₱9,000, then charged 10% for 30 days, your effective monthly cost is ₱1,000 / ₱9,000 ≈ 11.11%, and it gets higher once late penalties compound. For multi-month loans, compute APR using the actual cash-in-hand and installment schedule.

3) What counts as harassment and unfair collection

Common red flags (often unlawful if done by regulated lenders or their agents):

Threats of violence, jail, deportation, or public shaming; profane or degrading language.
“Doxxing”/shaming: messaging your contacts, employer, or family; posting edited photos or defamatory content to force payment.
Repeated calls at unreasonable hours; contacting you at work after you ask them to stop.
False representations (e.g., claiming a court judgment or a warrant exists when none does).
Collecting or processing more personal data than necessary; demanding full access to contacts, photos, GPS, microphone, etc., unrelated to creditworthiness or collection and without freely given, specific, informed consent.
Withholding mandatory disclosures (total cost of credit, fees, penalties, repayment schedule).

Regulators treat these as unfair debt collection practices, privacy violations, or deceptive acts under the FCPA, the Data Privacy Act, SEC rules, and—if criminal—under the Revised Penal Code and Cybercrime law.

4) Your remedies at a glance

A. Administrative / Regulatory

Complain to the proper regulator (see Section 6):
- SEC for lending/financing companies and their online lending platforms.
- BSP for banks/BSP-supervised institutions.
- NPC for privacy violations (contact scraping, shaming texts, over-collection of data).
Possible outcomes: fines; cease-and-desist; app takedowns; license suspension/revocation; deletion of unlawfully collected data; restitution/return of improper charges under the FCPA.

B. Civil

File a civil action to annul or reform unconscionable stipulations, recover overpayments, and claim damages (actual, moral, exemplary) and attorney’s fees. Courts may reduce interest/penalties to reasonable levels.

C. Criminal

For conduct amounting to grave threats/coercion, libel/cyber libel, extortion, identity theft, or unauthorized access, file a complaint with NBI-CCD or PNP-ACG and the prosecutor’s office.

5) Evidence: what to collect (checklist)

Loan documents: e-contracts, screenshots of in-app terms, amortization schedules, breakdown of fees, and any changes pushed via app updates.
Disclosure materials: marketing screens, pop-ups, and pre-contract information showing or failing to show the total cost of credit.
Payment records: receipts, bank statements, e-wallet logs.
Communications: call recordings (if legally obtained), voicemails, SMS, emails, in-app messages, and metadata (timestamps, sender numbers).
Harassment proof: screenshots of shaming posts or messages to contacts/employer, including URLs and dates.
Privacy trail: app permission prompts, device settings, and proof of contact scraping (e.g., your contacts receiving messages).
Identity trail: SEC registration name of the lender (often different from the app brand), and—if known—its officers or collection contractors.

6) Where and how to complain

Tip: You can pursue parallel tracks (e.g., SEC + NPC + criminal complaint) when the facts overlap.

SEC (Lending/Financing Companies; Online Lending Platforms)
- Use the SEC’s complaint intake (online form or email) for:
  - Operating without SEC registration/authority,
  - Unfair debt collection (threats, shaming, relentless calls),
  - Non-disclosure/misrepresentation of total cost of credit, and
  - Violations by third-party collectors acting for an SEC-supervised lender.
- Attach your ID, affidavit, and evidence (Section 5). Ask for: cease-and-desist, administrative penalties, and order to purge unlawfully collected data.
BSP (BSP-Supervised Financial Institutions)
- If the app is a bank/digital bank product or a BSP-licensed NBFI offering credit, file a consumer assistance request.
- Allege breach of disclosure, fair treatment, collection standards, and the FCPA. Request restitution of improper charges and policy remediation.
NPC (Data Privacy Act)
- For contact scraping, over-permissioning, public shaming, or data breaches.
- Relief can include compliance orders, penalties, and directives to delete/stop processing your data and your contacts’ data.
NBI-CCD / PNP-ACG + Prosecutor’s Office
- For criminal acts (threats, libel, extortion, computer-related offenses).
- Bring device and SIM (or certified copies) showing the messages, plus your affidavit.

7) Building your complaint: structure and sample language

A. Affidavit Outline (for SEC/NPC/Prosecutor)

Your identity and contact details.
The parties: legal name of the lender/collector and app brand (state “unknown” if not yet confirmed).
Loan facts: amount approved, net proceeds actually received, fees deducted, schedule, quoted vs. effective rate, and penalties.
Disclosure gaps: what was not shown (e.g., APR, finance charge breakdown).
Harassment timeline: dates, channels, recipients (including contacts/employer), and sample messages/screenshots.
Privacy violations: app permissions granted and how data were misused.
Legal basis: R.A. 3765 (disclosure), R.A. 11765 (FCPA), Data Privacy Act, SEC/BSP rules on fair collection, Civil Code (unconscionable stipulations), and applicable penal provisions.
Prayer: sanctions, takedown, restitution/refund, data deletion, cease harassing communications, and other just relief.

B. Demand/Notice to the Lender (optional but useful)

Send a concise notice asserting your rights, disputing unlawful charges, revoking consent to contact third parties, and demanding that all collection efforts be in writing while the dispute is pending. This helps show good faith and may reduce later harassment.

8) Computing whether the charges are excessive (simple tools)

Net-proceeds method:
- Effective monthly rate ≈ (Total charges for the period) ÷ (Cash you actually received).
Installment APR (rough):
- Use the IRR/XIRR function in a spreadsheet with Day 0 inflow = net proceeds (positive) and each installment as outflow (negative). Multiply the monthly IRR by 12 for an approximate APR.
Penalty stacking: If the contract imposes both penalty interest and late fees on the entire outstanding, that layering can be unconscionable even if each item seems small in isolation.

9) Special issues with contact scraping and “shaming”

Lawful basis for processing is required for each data category and purpose. “Consent” must be freely given—access conditioned on blanket permissions (contacts/photos) for a simple cash loan is usually not freely given or not necessary to perform the contract.
Purpose limitation and proportionality mean a lender cannot repurpose your contacts for collection harassment.
If your contacts received messages, encourage them to save screenshots and submit their own privacy complaints; they are data subjects with independent rights.
Ask regulators for an order to erase unlawfully collected data and to require the lender to notify your contacts of the corrective action.

10) Defending against abusive suits and threats

No jail for civil debt. Threats of imprisonment for inability to pay a private loan are baseless absent fraud or criminal conduct.
Venue gamesmanship: If sued in a distant city to harass you, consult counsel about improper venue and forum shopping defenses.
Proof of assignment: Third-party collectors must show authority to act and proper chain of assignment/agency if they claim to own or service your debt.
Defamation counterclaims may be available if the lender publicly shamed you with false statements.

11) For compliance teams and platforms

Map data flows. Collect only data necessary for underwriting/servicing; avoid contacts/photos/GPS unless demonstrably needed and consented to.
Plain-language disclosures up front: total cost of credit, fees, penalties, APR equivalents, and examples.
Collections playbook: ban profanity, threats, multi-party blasts, and calls outside reasonable hours; honor cease-and-desist and workplace no-contact requests.
Third-party oversight: put collectors under written contracts, train them on SEC/NPC rules, and audit call logs and complaint metrics.
Redress policy: offer fee reversals, rate corrections, and data deletion quickly to resolve complaints under the FCPA.

12) Frequently asked questions

Q: Can the lender access my gallery, microphone, or live location to “verify identity”? A: Not without a lawful basis and narrow, proportionate purpose. Overbroad access is fertile ground for an NPC complaint.

Q: The app deducted a huge “processing fee.” Is that legal? A: Fees aren’t per se illegal, but they must be clearly disclosed and reasonable; when combined with penalties they can render the effective rate unconscionable. Regulators can order restitution.

Q: I already paid far more than I borrowed due to penalties. Do I have a case? A: Potentially yes. Courts have repeatedly reduced or voided oppressive interest/penalty structures and allowed recovery of overpayments.

Q: Should I stop paying while I complain? A: Complaining does not automatically suspend obligations. Consider paying the undisputed principal while disputing unlawful charges; seek legal advice on your specific risk tolerance.

13) Practical next steps (one-page plan)

Secure your device: revoke app permissions (contacts/photos/mic/location), change passwords, and keep evidence intact.
Compute your effective rate and list all fees/penalties.
Send a written dispute to the lender; demand written-only communications and no third-party contact.
File complaints with SEC/BSP (as appropriate) and NPC; for threats or doxxing, NBI-CCD/PNP-ACG.
Consider civil action for reduction of unconscionable charges and damages.
Monitor retaliation; keep a harassment log with dates, times, numbers, and screenshots.

Disclaimer

This article is general information, not legal advice. Facts matter: if you face immediate threats, contact NBI-CCD/PNP-ACG and consult a lawyer. For regulatory filings, attach a sworn affidavit and robust documentation to maximize your chances of relief.