THREATENING DEBT COLLECTION CALLS FROM ONLINE LENDERS
A Philippine-law primer for borrowers, practitioners and compliance teams
1. Why the issue matters
Since 2018 the Securities and Exchange Commission (SEC), National Privacy Commission (NPC), Bangko Sentral ng Pilipinas (BSP) and the courts have been flooded with complaints of “harassment-style” collection tactics by online lending platforms (OLPs): verbal threats, public shaming messages to contact lists, fake legal notices, doxxing and even death threats. The spike coincides with the boom in uncollateralised, app-based “salary loans” whose approval time is measured in minutes. Borrowers are often unaware that by clicking “allow contacts/SMS”, they give collectors the tools for large-scale intimidation. (Credit Information Corporation, Respicio & Co.)
2. Key regulators & where their powers overlap
| Regulator | What it supervises | Major weapon against abusive collection |
|---|---|---|
| SEC | Lending & financing companies, 3rd-party agents | SEC Memorandum Circular (MC) 18-2019 – Unfair Debt Collection Practices; power to revoke licence and impose ₱1 M fine per count. (ADB Law and Policy Reform, RESPICIO & CO.) |
| BSP | Banks, e-money issuers & other BSP-supervised institutions | BSP Circular 1160-2022 (implements RA 11765). Explicit ban on “violent, obscene, humiliating or threatening language” in any collection effort; directors & officers face administrative sanctions and criminal referral. |
| NPC | All entities processing personal data | Data Privacy Act of 2012 (RA 10173) + NPC Circular 2022-01 (Admin Fines) – up to 5 % of annual gross income per repeat privacy breach (e.g., non-consensual use of contacts list). (National Privacy Commission, National Privacy Commission) |
| Department of Justice / PNP-ACG / NBI-CCI | Criminal investigation & prosecution | Charges under Revised Penal Code (grave threats, unjust vexation, grave coercion), Cybercrime Prevention Act (RA 10175) for online defamation and threats. |
3. What counts as an illegal, “threatening” collection call?
Under the combined reading of MC 18-2019, RA 11765 and the Data Privacy Act, a collector crosses the line when they:
- Use or threaten violence (“papatayin ka namin kapag di ka nag-bayad”).
- Shame, insult or use profane/obscene language in voice, text, chat or social media.
- Disclose or threaten to disclose the borrower’s debt to people not legally obliged to know (family, office mates, FB wall posts).
- Falsely represent themselves as court officers, lawyers, or government agents.
- Contact the borrower’s references or employer more than once except to verify location/work details (SEC MC 18 §4).
- Call before 6 a.m. or after 10 p.m. without written consent.
- Threaten arrest or imprisonment for mere non-payment of a civil debt (which is unconstitutional; Art. III §20, 1987 Constitution).
Any one of the above is per se an unfair debt-collection practice; the first incident already triggers SEC/BSP liability and possible criminal prosecution. (RESPICIO & CO.)
4. Applicable statutes and regulations (chronological snapshot)
| Year | Issuance | Core rule & penalty ceiling |
|---|---|---|
| 2004 | BSP Circ. 454 (credit-card ops.) | Banks must identify outsourced collection agents and ensure no harassment; borrowers may sue bank and agent. |
| 2012 | RA 10173 – Data Privacy Act | Processing personal data to harass or publicly shame can mean 3–6 yrs imprisonment + ₱1 M fine. (National Privacy Commission) |
| 2015–2024 | SC cases on threats/coercion (e.g., Jamaca G.R. 183681 [2015]) clarify that intimidation to force payment is Grave Threats (Art. 282 RPC) or Grave Coercion (Art. 286). (Lawphil, Lawphil) | |
| 2019 | SEC MC 18-2019 | Detailed prohibitions & ₱25 K–1 M administrative fines per act; repeat violation = licence revocation. (ADB Law and Policy Reform) |
| 2022 | NPC Circular 2022-01 (Admin Fines) | Tiered fines up to 5 % of gross annual income. (National Privacy Commission) |
| 2022 | RA 11765 + BSP Circ. 1160-2022 | Uniform consumer-protection code across financial sector; heavy BSP sanctions; civil damages. (Lawphil) |
| 2024–2025 | SEC enforcement blitz – cancellation of licences of Surity Cash, Hi-Fin, Magic Peso, Peso Wallet, etc., for harassment.* (Philstar.com, Manila Bulletin) |
*By May 30 2025 the SEC has revoked the registrations of 47 financing companies, citing continuing intimidation and privacy breaches. (Philstar.com)
5. Borrower remedies – step-by-step
Preserve evidence – screen-record calls, save audio files, screenshots, caller IDs, SMS, chat logs, emails.
Write a cease-and-desist / data-privacy demand (optional but strategic). Attach copies of MC 18 - 2019 and RA 11765 provisions. (RESPICIO & CO.)
File an online complaint
- SEC Lending/Financing Companies portal (15 minutes; attach evidence).
- NPC Online Complaint Form for privacy violations.
- BSP Consumer Assistance Mechanism (if lender is a bank/e-money issuer).
Escalate to criminal charges—Sworn statement before barangay, then PNP Anti-Cybercrime Group or NBI-Cybercrime for grave threats / cyber-libel.
Civil suit for damages, injunction, and attorney’s fees (Art. 33, 19, 21 Civil Code).
6. Lender/collector liability matrix
| Conduct | ADMIN penalty (SEC/BSP/NPC) | CRIMINAL exposure | Private damages |
|---|---|---|---|
| Violent or death threat | Up to ₱1 M (MC 18); licence revocation | Grave Threats (Art. 282 RPC) – up to 6 yrs | Moral + exemplary damages |
| Contacting contacts list | NPC fine ≤ 5 % of income | Unjust Vexation or Libel (RPC + RA 10175) | Privacy damages under Art. 26 CC |
| Fake warrant/“lawyer” claim | SEC/BSP fine + revocation | Usurpation of authority (Art. 177 RPC) | Attorney’s fees |
| Repeated 3 a.m. calls | SEC/BSP reprimand → revocation | Unjust Vexation | Nominal damages |
7. Jurisprudence highlights
- Jamaca v. People (G.R. 183681, 29 July 2015) – police officer’s verbal death threat over a debt upheld as Grave Threats. (Lawphil)
- People v. Caluag (G.R. 171511, 30 Mar 2009) – threatening to expose debtor publicly unless paid constitutes Grave Threats even when no weapon is shown. (Lawphil)
- Mission v. People (G.R. L-3488, 30 Nov 1950) – intimidation to compel payment is Light Threats when the menace is not serious. (Lawphil)
While none is about online apps, the rulings guide prosecutors on evidentiary thresholds and sentencing.
8. Cross-border & fintech quirks
Abusive calls often originate from foreign-owned BPOs in Manila or “rep offices” in Singapore or Shenzhen. Under RA 11765 §36 lenders must list every third-party service provider; failure (as in Hi-Fin Lending Inc.) justifies licence cancellation even if harassment occurs offshore. (Inquirer Business)
9. Compliance checklist for legitimate online lenders
- Register with SEC and obtain Certificate of Authority to Operate OLP.
- File and update list of collection agents (RA 11765 §34).
- Implement written Fair Debt Collection Policy, including call-hour window, script prohibitions, escalation matrix.
- Do Privacy Impact Assessment before requesting any phone permission; default to no access to contact lists.
- Record all calls (with consent) and keep for 3 years; furnish copy to regulators on request.
- Train agents on Articles 282-287 RPC and NPC Admin Fine rules.
Failure in any step = presumption of bad-faith collection under SEC rules.
10. Practical tips for borrowers
- You cannot be jailed for mere non-payment of a loan (Const. Art III §20).
- Answer one call, get the agent’s full name, company, SEC Registration # and phone #; refuse further discussion until they provide it.
- Use call-recording consent formula: “I am recording this call for my protection. Do you wish to continue?”
- After a written demand, pay only via lender’s official bank account or e-wallet, never to a collector’s personal GCash number.
- Consider restructuring or Small Claims Court (≥ ₱1 M limit as of 2022) rather than rolling over to another OLP.
11. Looking ahead
With the passage of RA 11765 and BSP/SEC’s aggressive 2025 campaign, regulators finally have teeth. The trend is toward zero-tolerance: every harassment incident is treated as an independent offense, and repeat violators lose their licence permanently. Borrowers, meanwhile, are increasingly privacy-literate and willing to litigate. Expect:
- NPC to issue sector-specific “Loan App Data Minimisation Guidelines” (draft announced April 2025).
- SEC to migrate its complaints portal to real-time docket tracking Q4 2025.
- BSP pilot of an industry-wide “blacklist” of abusive collectors shared with banks and fintechs.
Bottom line
Threatening collection calls are no longer a grey area. They breach SEC MC 18-2019, RA 11765, the Data Privacy Act and often the Penal Code—simultaneously. Borrowers have a multi-door hallway for redress, and lenders that ignore the rules face million-peso fines, licence revocation, and jail time for their officers.
Stay vigilant, document every incident, and use the fast-growing regulatory arsenal to protect your rights.