Reporting Lending App Scams in the Philippines A comprehensive legal guide (updated 24 July 2025)
Disclaimer. This material is for general information only and is not a substitute for individualized legal advice. Where stakes are high, consult a Philippine lawyer or the relevant agency before acting.
1. Why Online‑Lending‑App Scams Matter
- Explosive growth. Since smartphones became ubiquitous, hundreds of “quick‑cash” apps have emerged, many operating without a licence.
- Common abuses. Usurious interest, hidden “processing fees,” blanket access to your contacts, public shaming, threats, and fake legal notices.
- Impact. Victims often suffer reputational damage, mental distress, and spiralling debt.
2. Legal Framework
| Law / Issuance | Key Points | Typical Violations by Scammers |
|---|---|---|
| Lending Company Regulation Act of 2007 (RA 9474) | SEC licence required; max ₱1 M admin fine + revocation; 6 mos–6 yrs imprisonment for unlicensed lending. | Operating an app without SEC registration. |
| Truth in Lending Act (RA 3765) + BSP Circular 755 (Disclosure) | Requires clear disclosure of finance charges and APR. | Concealing actual cost of borrowing. |
| Financial Products and Services Consumer Protection Act (RA 11765, 2022) | Creates “Financial Consumer Protection” regime; allows restitution, disgorgement, and fines up to ₱2 M per transaction. | Mis-selling, unconscionable interest, harassment. |
| Data Privacy Act (RA 10173) + NPC Circular 16‑02 | Personal data must be collected lawfully, minimally, and with consent. | Pulling entire contact list; public shaming SMS blasts. |
| Cybercrime Prevention Act (RA 10175) | Penalises libel, threats, and identity theft when committed through ICT. | Threatening to “expose” a borrower on social media. |
| SIM Registration Act (RA 11934, 2023) | SIMs must be traceable; anonymity harder. | Using unregistered SIMs to harass debtors. |
| Revised Penal Code (e.g. Arts 282, 287) | Grave threats, unjust vexation, libel. | Posting edited nude photos of a debtor (“photo‑shaming”). |
| SEC Memorandum Circulars 18‑2019, 10‑2021, 19‑2022 | Limits apps to five phone permissions (camera, basic storage, location, biometrics, calendar). | Accessing contacts, audio, and SMS without express need. |
| BSP Rules (if the lender is a bank/EMI) | Consumer Assistance Mechanism, interest caps on credit cards (BSP C. 1098) | Charging >3% monthly on credit‑card loans. |
Remember: A single act can violate several laws—e.g., an unlicensed app that harasses you via SMS commits at least three distinct offenses.
3. Which Agency Handles What?
| Agency | When to Complain | Contact/Portal |
|---|---|---|
| Securities and Exchange Commission (SEC) Corporate Governance and Finance Dept. | Unregistered lending/financing companies, or licensed firms breaching SEC app rules. | complaint portal or e‑mail cgfd_md@sec.gov.ph. Attach affidavit + evidence. |
| Bangko Sentral ng Pilipinas (BSP) Financial Consumer Protection Dept. | Banks, e‑money issuers, BNPL platforms supervised by BSP. | consumeraffairs@bsp.gov.ph or BSP Online Buddy. |
| National Privacy Commission (NPC) | Unauthorized contact scraping, doxxing, privacy breaches. | complaints@privacy.gov.ph – must file < 15 days from discovery. |
| PNP Anti‑Cybercrime Group or NBI Cybercrime Division | Threats, libel, hacking, phishing. | Walk‑in or online e‑Complaint desk; bring digital and printed evidence. |
| Department of Justice (DOJ) Office of Cybercrime | For referral or if you need prosecutorial opinion before filing in City Prosecutor’s Office. | cybercrime.doj.gov.ph |
| Small Claims / Civil Court | To recover money < ₱400 000 or damages for harassment. | File with MTC/MeTC after barangay conciliation (if both parties reside in same city/municipality). |
4. Red Flags: Spotting a Scam App
- No SEC Certificate of Authority (searchable at <sec.gov.ph data-preserve-html-node="true">).
- Exorbitant “service fee” (e.g., 30 % upfront).
- APR > 36 % or undisclosed; note: no statutory interest cap but courts void “unconscionable” rates.
- Breaches privacy—requests contact list, photo gallery, microphone access.
- Harassment tactics—threats of arrest, public posting of borrower’s face, contact‑spamming friends.
5. Step‑by‑Step Reporting Guide
Tip: Create a secure evidence folder (PDF print‑outs + screen recordings); metadata matters.
5.1 Verify the Lender’s Status
- Go to SEC Company Registration System; download proof that the entity is “Revoked/None”.
- If BSP‑Supervised, check BSP’s List of Regulated Entities.
5.2 Draft Your Complaint‑Affidavit
Include:
- Your identity and contact info.
- Chronology of events (dates, amounts, how the app contacted you).
- Violations invoked (e.g., RA 9474, RA 10173).
- Prayer (what you want—cessation, deletion of data, damages, criminal prosecution).
- Sworn attestation, signed before notary or e‑notary.
5.3 File with the SEC
- Submit to CGFD via e‑mail or in person; attach screenshots, call recordings, app APK if possible.
- SEC issues Show‑Cause Order to the app operator.
- Possible outcomes: cease‑and‑desist order, app takedown request to Google/Apple, fines, revocation, or referral to DOJ.
5.4 Parallel NPC Complaint
- File within 15 days of knowledge; use NPC Complaint Form + Proof of Identity.
- NPC may conduct Fact‑Finding → Compliance Order → Recommend criminal prosecution (penalties up to 6 years + ₱5 M).
5.5 Cybercrime Case (PNP ACG/NBI)
- Bring two printed copies plus USB stick of digital evidence.
- Investigators draft inquest or regular complaint to DOJ prosecutor.
- Preserve chain of custody; hash files (e.g., SHA‑256).
5.6 Civil / Small‑Claims Action
- If you paid unlawful fees, demand letter first → file Small Claims (no lawyer needed) → execute judgment via sheriff.
6. Penalties & Remedies
| Offense | Liability of Scammer |
|---|---|
| Unlicensed Lending (RA 9474 § 13) | ₱10 000–₱50 000 fine + 6 mos–1 yr jail (each count). |
| Continued Ops after SEC Revocation | ₱1 M fine + ₱10 000/day + criminal contempt. |
| Privacy Violations | 1–6 yrs imprisonment + up to ₱5 M fine; directors/officers personally liable. |
| Libel/Threats (Cybercrime) | 6 mos–8 yrs imprisonment + damages. |
| Consumer Financial Abuse (RA 11765) | Restitution + double recovery + ₱2 M per transaction administrative fine. |
Victims can also claim moral and exemplary damages under the Civil Code (Arts 19‑21, 2219).
7. Borrower Rights Under Philippine Law
- Right to transparent pricing – APR, fees, total cost must be disclosed before loan disbursement.
- Right to privacy – Only necessary data may be processed; no “contact list scraping”.
- Right to fair collection – No profanity, violence, or public humiliation (SEC MC 19‑2022).
- Right to redress – Free to elevate complaint to SEC, BSP, NPC, then the courts.
- Right to data deletion once the loan is settled.
8. Practical Tips to Avoid Trouble
- Check the licence first before downloading.
- Read app permissions—deny contact access; if the app refuses to proceed, walk away.
- Keep written records of repayments; use bank transfer not cash.
- Set strong phone security to stop stealth screenshot scraping.
- Educate contacts—tell family not to respond to “shaming” messages.
9. Frequently Asked Questions
| Question | Short Answer |
|---|---|
| Are lending apps per se illegal? | No. Apps run by SEC‑licensed lending or financing companies are lawful. |
| Is there an interest cap? | No statutory cap, but rates deemed “unconscionable” can be voided; credit‑card cap (3 %/mo) doesn’t apply to cash loans. |
| Can an app sue me for non‑payment? | Yes, through civil court, not by threatening you with jail time unless it’s estafa (bad checks etc.). |
| May the lender contact my employer? | Only to verify employment, not to shame or threaten. |
| How long do I have to file a privacy complaint? | 15 days from knowledge of the violation (NPC Rules § 3). |
10. Sample Outline of a Complaint‑Affidavit
You can copy‑paste and adapt.
REPUBLIC OF THE PHILIPPINES )
CITY OF ___________ ) S.S.
COMPLAINT‑AFFIDAVIT
I, (Name), Filipino, of legal age, state under oath:
1. I downloaded the mobile application “CASHNOW” on 10 May 2025.
2. The app charged a ₱1 000 “processing fee” on a ₱5 000 loan (20 %) and disclosed an APR only after disbursement.
3. On 20 May 2025, respondents accessed my contacts and sent defamatory messages …
4. Respondents are **not** in SEC’s list of licensed lending companies.
5. These acts violate RA 9474, RA 10173, and RA 10175, among others.
**PRAYER.** Wherefore, I respectfully pray that:
a) Respondents be charged criminally;
b) SEC issue a cease‑and‑desist order;
c) Respondents return unlawfully collected fees and pay damages.
IN WITNESS WHEREOF, I have hereunto set my hand this 24 July 2025.
(Signed)Have it notarized, then attach your evidence inventory.
Conclusion
Combating predatory lending apps requires swift reporting and solid documentation. Philippine law provides multiple avenues—administrative, criminal, civil—to shut down rogue operators and compensate victims. By knowing your rights, gathering clear evidence, and choosing the right agency, you can transform a distressing experience into decisive action that protects not only yourself but the broader public.