Disclaimer: This article is intended for general informational purposes only and does not constitute legal advice. If you believe you have been scammed or have a legal dispute with a lending company, consult a qualified lawyer for advice tailored to your situation.

Overview

Lending companies play a pivotal role in providing credit to individuals and businesses in the Philippines, especially those who may not have access to traditional bank loans. While many lending companies operate legally and adhere to the relevant regulations, some unscrupulous entities engage in scams or unlawful activities, leaving borrowers vulnerable. If you believe you have been scammed, it is important to know your rights, understand the legal framework, and be aware of the avenues for redress.

This article covers the following topics:

Common Lending Scams and Red Flags
Relevant Laws and Regulations
Regulatory Bodies and Where to File Complaints
Steps to Filing a Complaint
Evidence Gathering
Possible Legal Remedies
Preventive Measures

1. Common Lending Scams and Red Flags

Lending scams vary, but frequently involve:

Upfront Fees
Fraudsters demand fees or “processing charges” before approving or releasing a loan. Genuine lending companies typically deduct processing fees from the disbursed loan rather than demanding payment beforehand.
Unrealistic or “Too-Good-to-Be-True” Offers
Extremely low interest rates, high loan amounts with little to no collateral, or “100% guaranteed approval” are classic red flags.
Harassment and Illegal Collection Methods
While this is not always a scam per se, illegal collection practices—such as threats, public shaming on social media, or contacting third parties (e.g., your relatives or friends) repeatedly—are grounds for complaint.
Unregistered Online Lending Applications
Some mobile apps claim to offer instant loans but are unregistered or fail to comply with privacy regulations. They may also misuse borrowers’ data.

2. Relevant Laws and Regulations

2.1. Republic Act No. 9474 (Lending Company Regulation Act of 2007)

Governs the establishment, operation, and regulation of lending companies in the Philippines.
Requires lending companies to register with the Securities and Exchange Commission (SEC).
Sets rules on interest rates, disclosure requirements, and penalties for violations.

2.2. Republic Act No. 7394 (Consumer Act of the Philippines)

Protects consumers against deceptive, unfair, and unconscionable sales acts or practices.
Lending scams can fall under unfair or fraudulent acts, giving victims a basis to file a complaint.

2.3. Bangko Sentral ng Pilipinas (BSP) Regulations

While BSP primarily regulates banks, quasi-banks, and other financial institutions (not typical lending companies), certain financing or lending firms that accept funds from the public may also fall under BSP oversight.

2.4. Data Privacy Act of 2012 (Republic Act No. 10173)

Prohibits the unauthorized disclosure or misuse of personal information.
Lending companies that illegally collect or share sensitive data, especially through mobile apps, violate data privacy regulations.

2.5. Cybercrime Prevention Act of 2012 (Republic Act No. 10175)

Addresses online fraud, phishing, and other cyber-related offenses.
Online lending scams and fraudulent digital practices can be charged under this law.

2.6. Revised Penal Code (RPC)

Many forms of fraud or swindling (estafa) are penalized under the RPC.
When there is a direct misrepresentation or deceit in obtaining money or property, a criminal complaint for estafa may be pursued.

3. Regulatory Bodies and Where to File Complaints

Securities and Exchange Commission (SEC)
- The primary regulator for non-bank lending companies under R.A. 9474.
- Handles complaints against lending companies, especially if these companies are operating without registration, violating lending regulations, or engaging in unfair collection practices.
Bangko Sentral ng Pilipinas (BSP)
- Oversees banks, quasi-banks, and other BSP-supervised financial institutions.
- If you suspect the entity is an unlicensed bank or is violating BSP circulars, the BSP can be a relevant venue for complaints.
Department of Trade and Industry (DTI)
- Can receive complaints under consumer protection laws if the issue involves deceptive acts or unfair business practices.
National Bureau of Investigation (NBI) or Philippine National Police (PNP)
- If the scam involves fraud, estafa, or cybercrimes, you may file a complaint to the NBI or PNP Anti-Cybercrime Group.
- They can initiate investigations leading to possible criminal charges.
Local Government Units (LGUs)
- Some LGUs have Consumer Welfare Desks or public assistance centers where initial complaints can be lodged, though more formal cases are typically elevated to the SEC, DTI, or relevant judicial bodies.

4. Steps to Filing a Complaint

Step 1: Gather Preliminary Information

Identify the exact name of the lending company or the individual offering the loan.
Gather key documents (loan agreements, payment receipts, screenshots of conversations, text messages, etc.).
Check registration with the SEC or BSP to confirm if the entity is legitimate.

Step 2: Attempt to Resolve Internally (if possible)

If the lending company has a customer service channel or grievance mechanism, try to formally lodge a complaint there.
Some disputes may be resolved without escalating to the authorities (e.g., if it’s a misunderstanding or a contractual dispute).
Keep all written communications or responses.

Step 3: File a Formal Complaint

Securities and Exchange Commission (SEC)
- You can file a complaint if the lending company is noncompliant or unregistered.
- Submit a written complaint, supported by documents that illustrate the scam or violation.
- The SEC may then investigate, summon the company for a hearing, or impose sanctions.
DTI or LGU Consumer Welfare Desks
- Applicable if there is an element of consumer rights violation (deceptive advertising, unfair trade practices, etc.).
Criminal Complaints (NBI/PNP/Prosecution Office)
- If you suspect fraud (estafa) or cybercrime.
- File a complaint-affidavit outlining the facts, attaching any evidence.
- The case may be subject to preliminary investigation by the public prosecutor to determine probable cause.

Step 4: Attend Required Mediation or Hearings

The relevant agency may call you and the lending company for mediation.
If mediation fails, the complaint might proceed to administrative or judicial action.

Step 5: Track the Progress of the Case

Inquire regularly about the status of your complaint.
Comply with any follow-up requests for additional documentation or testimony.

5. Evidence Gathering

Loan Documents and Correspondence
- Signed loan contracts, receipts for payment, screenshots of conversation or email threads, text messages.
Proof of Monetary Transactions
- Bank deposit slips, e-wallet transfers, or other payment records.
Advertising Materials or “Offer” Messages
- If the scam involved misleading ads or promotional messages, screenshot them.
Witness Statements
- If others were involved or witnessed the transaction, secure written statements.
Government Records
- SEC Certificate of Registration details or any official communications from the SEC or other regulatory agencies.

6. Possible Legal Remedies

Administrative Penalties
- The SEC can impose fines, suspend or revoke the license of noncompliant lending companies.
Cease and Desist Orders
- For unregistered or illegally operating lending entities.
Civil Remedies
- You can file a civil case for damages, breach of contract, or other violations, where the court may order restitution or payment of damages if you prevail.
Criminal Penalties
- For estafa, cyber fraud, or other criminal violations.
- If found guilty, parties could face imprisonment or monetary fines under the Revised Penal Code or other applicable laws.
Protection of Personal Data
- The National Privacy Commission can penalize companies that violate data privacy rights, imposing fines and other penalties.

7. Preventive Measures

Check SEC Registration
- Before engaging with a lending firm, verify if it is registered by searching the SEC’s list of licensed lending companies.
Read Contracts Thoroughly
- Look for hidden fees, penalty clauses, or unusual terms.
Never Pay Upfront
- Authentic lending companies typically deduct fees from the disbursed loan.
Beware of Pressure Tactics
- Fraudsters often push for quick decisions and try to limit your time to think or verify.
Protect Your Data
- Limit the personal information you give out and carefully review the permissions sought by lending applications.
Stay Informed
- Monitor news releases and advisories from the SEC, BSP, DTI, or the National Privacy Commission regarding new scams or blacklisted entities.

Conclusion

Filing a complaint against a lending company scam in the Philippines involves understanding your rights, knowing where to file complaints, and following the proper procedures to bring the matter to authorities. The country’s regulatory framework—embodied in laws such as the Lending Company Regulation Act, the Consumer Act, the Data Privacy Act, and the Cybercrime Prevention Act—provides mechanisms for both administrative and judicial recourse.

Should you find yourself scammed, immediately gather all documentary evidence, assess which regulatory or law enforcement agencies have jurisdiction over your case, and consider seeking professional legal advice. Proactive diligence—verifying a company’s legitimacy, reading contracts carefully, and staying informed of consumer advisories—remains the best defense against becoming a victim of lending scams.

Important Note: While this article aims to provide comprehensive information, every case is unique. If you believe you have been defrauded or are involved in a dispute with a lending company, consult a qualified lawyer or approach the relevant government agency for personalized guidance.