Filing a Complaint Against Abusive Online Lending Apps in the Philippines
A comprehensive legal guide updated to April 2025
1. Why this matters
Since 2018 the Philippines has seen an explosion of small‑ticket “online lending apps” (OLAs). Many operate legitimately, but hundreds have been closed or penalized for practices such as:
- Public shaming via text blasts or social‑media posts
- Harassing calls to borrowers’ family, office or phone contacts
- Threats of arrest or suit for “estafa” (usually baseless)
- Hidden fees, usurious interest, or “double deduction” of repayments
These acts violate consumer‑finance, data‑privacy and criminal laws. Victims have several administrative and judicial avenues for redress.
2. Legal & regulatory framework
| Rule | Key content | Who enforces |
|---|---|---|
| Republic Act 9474 (Lending Company Regulation Act) | Lending businesses must obtain a Certificate of Authority (CoA) from the Securities & Exchange Commission (SEC) and follow reporting & capital rules. | SEC |
| SEC Memorandum Circular (MC) No. 18‑2019 | Prohibition of Unfair Debt‑Collection Practices—no threats, obscene language, public disclosure of debt, or contact outside 6 AM‑10 PM. | SEC |
| SEC MC No. 10‑2021 | Requires OLAs to register each mobile app; mandates in‑app disclosure of interest, fees, privacy notice and complaint e‑mail. | SEC |
| Republic Act 11765 (Financial Consumer Protection Act, 2022) | Broad consumer‑finance bill of rights; empowers BSP, SEC, IC and CDA to order restitution, disgorgement and damages. | BSP / SEC / IC |
| Bangko Sentral ng Pilipinas (BSP) Circular No. 1133 (2022) | Mirrors RA 11765 for BSP‑supervised institutions (BSIs), including banks and licensed e‑money issuers that partner with OLAs. | BSP |
| RA 10173 (Data Privacy Act) & NPC Circular 16‑01 | Processing of personal and “phone contacts” data requires freely given, specific, informed consent. | National Privacy Commission (NPC) |
| RA 10175 (Cybercrime Prevention Act) | Cyber‑libel, threats, unlawful processing of data can be prosecuted under its penal provisions. | DOJ‑OOC, NBI CDD, PNP ACG |
3. Identifying an “abusive” OLA
An OLA is presumptively abusive if it:
- Lacks an SEC Certificate of Authority or appears on the SEC’s “LIST OF UNREGISTERED ENTITIES.”
- Conducts “contact scraping” (requires access to all phone contacts before you can proceed).
- Charges interest, penalties and fees that, in aggregate, breach the 6% per month cap in SEC MC 3‑2022.
- Uses harassment tactics outlawed by SEC MC 18‑2019 (e.g., “You will be jailed tomorrow,” “We will message everyone in your phonebook,” or doctored nude photos).
- Misrepresents its affiliation with BSP‑regulated banks or payment processors.
4. Where—and how—to complain
Golden rule: Send the complaint to each regulator that has jurisdiction. Simultaneous filings are allowed and often advisable.
| Forum | When to choose it | How to file | Outcome |
|---|---|---|---|
| SEC Corporate Governance & Finance Department — Financing & Lending Division (CGFD‑FLD) | Any loan from a stand‑alone lending company or an app that is not a bank/e‑money issuer. | 1. Use the SEC “E‑FAST” portal (https://cifss.secexpress.ph). 2. Upload Complaint Form 1 (downloadable on site), screenshots, call logs, proof of payment. 3. E‑mail additional evidence to flcd_queries@sec.gov.ph. | Investigation; may issue cease‑and‑desist order (CDO), revoke CoA, impose ₱50k–₱1 M fines, or file criminal charges at DOJ. |
| Bangko Sentral ng Pilipinas – Consumer Assistance Mechanism (CAM) | If the OLA is merely a front‑end for a BSP‑licensed bank, EMI or lending platform. | 1. Try to resolve directly (prerequisite under RA 11765). 2. If no reply in 15 calendar days, e‑mail consumeraffairs@bsp.gov.ph or lodge at CMS portal (https://cms.bsp.gov.ph). | BSP may order refunds, stop‑collection orders, or administrative fines up to ₱200 k per day. |
| National Privacy Commission | Any misuse or non‑consensual disclosure of your contacts, photos, or personal data. | 1. Write the Data Privacy Complaint Form (NPC Circular 16‑04). 2. Serve a 15‑day demand to the company’s Data Protection Officer (DPO) first. 3. After the lapse, lodge online via https://complaints.npc.gov.ph. | NPC has issued ₱5 M fines and ban‑from‑processing orders against OLAs; officers may face jail of 1–3 years. |
| Department of Trade & Industry – Fair Trade Enforcement Bureau (DTI‑FTEB) | For deceptive advertising (e.g., “0% interest” but hidden fees). | File walk‑in or e‑mail consumercare@dti.gov.ph. | Mediation → adjudication; penalties under RA 7394 (Consumer Act). |
| PNP Anti‑Cybercrime Group / NBI Cybercrime Division | When threats, doxing, fake nude images or cyber‑libel are involved. | Sworn Complaint‑Affidavit + evidence; either agency can file an inquest under RA 10175. | Criminal prosecution; penalties up to 8 years and/or ₱1 M fine. |
5. Evidence checklist
| What | Why it matters |
|---|---|
| Full name of app (as shown in Play Store/iOS) & package ID | Distinguishes clones; needed by NPC & SEC |
| Screenshots of harassment texts, group chats or “edited photos” | Shows unfair collection practice & privacy breach |
| Call‑recordings (if legal; one‑party consent under Art. III § 3?) | Strengthens cyber‑harassment claim |
| Proof of payments, transaction IDs & e‑wallet reference numbers | Establishes that alleged “non‑payment” is false |
| Copy of privacy consent screen & terms | Shows lack of informed consent or hidden clauses |
| SEC certificate search result screenshot | Demonstrates company is unregistered |
6. Step‑by‑step template (SEC complaint)
- Heading: “Complaint for Violations of RA 9474 & SEC MC 18‑2019”
- Parties: Your name, address, ID; Lending Company’s name, CoA No. (if any), principal address
- Narrative: Chronological account of loan, payment schedule, harassment incidents
- Causes of Action:
- a. Unfair collection (MC 18‑2019 §4)
- b. Misrepresentation of interest & fees (MC 10‑2021 §5)
- c. Operation without CoA (RA 9474 §12) if applicable
- Prayer: Cease‑and‑desist; revocation of CoA; administrative fines; referral for criminal prosecution under §20 RA 9474 (₱10 k–₱50 k and/or 6 months–10 years imprisonment).
- Verification & Certification of Non‑Forum Shopping.
- Attach evidence list.
Send as PDF via E‑FAST or printed in triplicate at the SEC Main Office, Mandaluyong.
7. Other legal remedies
- Small‑Claims Court (A.M. 08‑8‑7‑SC, as amended) – Sue for reimbursement of unlawful fees up to ₱400,000; no lawyer required.
- Civil action for damages (Art. 19‑21 Civil Code) – For humiliation or mental anguish.
- Anti‑Violence Against Women & Children Act (RA 9262) – If threats target a female borrower or her kids; includes protection orders against further harassment.
- Barangay Katarungang Pambarangay – Optional first step for civil claims ≤ ₱200 k against local entities.
8. Frequently asked questions
| Question | Short answer |
|---|---|
| Do I have to keep paying while the complaint is pending? | Yes, if the loan is legitimate and undisputed. File for refund of illegal fees rather than total non‑payment. |
| The app is already gone from Google Play, can I still complain? | Yes. Jurisdiction attaches to any violation committed while operating; SEC often pursues directors long after the takedown. |
| Can debt collectors call my office HR? | Only to verify employment status once, never to disclose the debt amount (SEC MC 18). |
| Can they sue me for estafa (B.P. 22 or Art. 315)? | Generally no. Borrowing money and failing to pay is civil, unless you issued a bounced check or gave falsified documents. |
| Will filing with NPC stop the calls? | NPC can issue a “Stop Processing Order” that usually ends contact scraping within days, but you must present clear privacy‑violation evidence. |
9. Practical tips & best practices
- Use e‑mail, not chat, when negotiating—creates a paper trail.
- Revoke app permissions (Contacts, SMS, Storage) immediately after installation; Android 12+ lets you grant “while using the app” access.
- Monitor SEC advisories (sec.gov.ph > Advisories) every few weeks; your app may suddenly be listed.
- Warn your contacts in advance; provide them a short statement: “Any shaming message about me from X‑Loan is unlawful. Please save a screenshot.”
- Consult a lawyer if the loan exceeds ₱400 k or you receive a formal demand letter signed by counsel.
Conclusion
Abusive online‑lending practices thrive on fear and lack of information. Philippine law now offers clear, multi‑layered remedies—from the SEC’s cease‑and‑desist powers and NPC privacy enforcement to criminal sanctions under the Cybercrime Act. Success rests on prompt evidence‑gathering and simultaneous complaints to the proper forums. Armed with this guide, borrowers can assert their rights, halt harassment, and help cleanse the fintech space of predatory actors.