In the Philippines, the rise of fintech and online lending platforms (OLPs) has led to an increase in aggressive and often illegal debt collection practices. One common tactic involves collectors harassing borrowers while refusing to provide a clear Statement of Account (SOA) or a breakdown of the debt.
Under Philippine law, this is not just unprofessional—it is often illegal. Here is a comprehensive guide on your rights and the legal steps you can take.
1. The Right to Information: Why the SOA Matters
Under the Truth in Lending Act (Republic Act No. 3765), creditors are required to provide full disclosure of the cost of credit. This includes:
- The principal amount.
- Interest charges and how they are calculated.
- Service charges, fees, and penalties.
If a collector demands payment but refuses to provide an SOA, they are effectively hiding the math behind your debt. You have the right to know exactly what you are paying for before you settle a single centavo.
2. Defining "Harassment" Under Philippine Law
The Securities and Exchange Commission (SEC), through Memorandum Circular No. 18, Series of 2019, explicitly prohibits unfair debt collection practices. Harassment includes:
- Threats of Violence: Any threat to use physical force against you, your reputation, or your property.
- Profanity/Insults: Using obscene or abusive language to humiliate you.
- Shaming: Contacting people in your contact list (phone hacking) or posting your debt on social media.
- False Representation: Pretending to be a lawyer, a court official, or a police officer to scare you into paying.
- Inconvenient Hours: Contacting you between 10:00 PM and 6:00 AM, unless you gave prior consent.
3. Immediate Steps to Take
A. Demand the SOA in Writing
Stop communicating via phone calls if the collector is abusive. Move the conversation to email or recorded chat. Send a formal demand:
"I am willing to settle my legitimate obligations; however, I require a formal Statement of Account (SOA) detailing the principal, interest, and penalties. Until this is provided, I cannot verify the amount being claimed."
B. Document Everything
Legal cases are built on evidence. Save the following:
- Screenshots of threatening text messages or chat logs.
- Call logs (frequency and timing of calls).
- Recordings of calls (inform the collector you are recording the call for legal purposes).
- Screenshots of any social media posts made by the collector regarding your debt.
C. Do Not Be Intimidated by "Warrants of Arrest"
In the Philippines, there is no imprisonment for non-payment of debt (Article III, Section 20 of the 1987 Constitution). Unless you issued a "bouncing check" (BP 22) or committed estafa (fraud), a collector cannot simply have you arrested. Small claims cases are civil, not criminal.
4. Where to File a Complaint
If the harassment continues or they still refuse to provide an SOA, you should escalate the matter to the following agencies:
| Agency | Role | When to Contact |
|---|---|---|
| SEC (CGFD) | Regulates Lending Companies/OLPs | If the lender is a registered corporation and uses unfair collection tactics. |
| National Privacy Commission (NPC) | Protects Data Privacy | If the collector accessed your contacts or posted your private info online. |
| Bangko Sentral ng Pilipinas (BSP) | Regulates Banks/Credit Cards | If the collector is representing a bank or a bank-affiliated credit card. |
| PNP Anti-Cybercrime Group | Investigates Online Threats | If you are being threatened with violence or grave coercion online. |
5. Legal Remedies: The "Cease and Desist"
If the harassment is severe, you may consult a lawyer to send a formal Cease and Desist Letter. This warns the lending company that their third-party collectors are violating SEC regulations and that you are prepared to file a formal administrative or criminal complaint.
The Role of the Data Privacy Act (RA 10173)
Many online lending apps scrape your phone's contact list. This is a massive violation of the Data Privacy Act. If a collector calls your boss or your parents—who are not co-makers of the loan—they have violated your privacy. You can file a complaint with the NPC, which has the power to shut down these apps.
Summary of Rights
- Right to Verification: You do not have to pay an unverified amount.
- Right to Privacy: Your debt is a private matter between you and the lender.
- Right to Respectful Treatment: Debt does not strip you of your human dignity.
Would you like me to draft a template for a formal demand letter to a lender requesting a Statement of Account?