Below is a comprehensive legal guide on addressing harassment by lending companies over debt repayment in the Philippine context. This article covers the regulatory framework governing lending companies, the rights and remedies of borrowers, and the steps one can take to protect themselves from unfair or abusive debt collection practices.

1. Introduction

Debt repayment issues can become stressful, especially when lending or financing companies resort to aggressive collection tactics. In the Philippines, debt collection is governed by various laws, rules, and regulations designed to protect borrowers from unethical or abusive practices. Understanding these legal protections—and the remedies they provide—is crucial in addressing harassment.

2. Overview of the Legal Framework

Republic Act (R.A.) No. 9474 – The Lending Company Regulation Act of 2007
- Regulates the establishment and operation of lending companies.
- Requires lending companies to register with the Securities and Exchange Commission (SEC) and comply with capitalization, interest rate disclosures, and fair collection practices.
R.A. No. 3765 – The Truth in Lending Act
- Mandates lenders to fully disclose the terms of the loan (finance charges, interest rates, etc.) to protect consumers from hidden or excessive charges.
R.A. No. 10173 – The Data Privacy Act of 2012
- Protects personal information from unauthorized or excessive use.
- Regulates how lending companies handle borrowers’ personal data, including contact information.
SEC Memorandum Circulars on Debt Collection Practices
- The SEC has released a number of circulars (e.g., SEC MC No. 18, s. 2019 and others) explicitly prohibiting unfair debt collection practices such as threats, public shaming, or contacting third parties without consent.
Revised Penal Code (RPC)
- Certain forms of harassment (e.g., threats, libel, unjust vexation) can give rise to criminal liability under the RPC.
Batas Pambansa Blg. 22 (BP 22) – Anti-Bouncing Checks Law
- While not directly about collection harassment, it is relevant for borrowers who have issued bounced checks. Nonpayment of a simple loan is not generally criminal in the Philippines, but issuing a check that bounces can trigger criminal liability.

3. What Constitutes Harassment in Debt Collection

Debt collection becomes harassment when a lending company resorts to any of the following abusive or unethical practices:

Threatening Violence or Harm
- Using or threatening physical harm, property damage, or defamation to force repayment.
Public Shaming or Posting Borrower’s Personal Information
- Posting a borrower’s photo or personal information on social media to shame them or contacting people in the borrower’s contact list (family, friends, employer) without explicit permission.
Use of Obscene or Profane Language
- Repeated insults, slurs, or other offensive remarks during collection calls or messages.
Repeated Unsolicited Messages or Calls
- Harassing phone calls or text messages at odd hours or an excessive frequency that causes distress or disrupts the borrower’s daily life.
Threatening False Legal Action
- Issuing baseless threats of criminal charges or claiming the borrower will be immediately arrested without due process.
Misrepresentation or Fraudulent Statements
- Posing as government agents, court personnel, lawyers, or law enforcement officers to intimidate the borrower into paying.

4. Relevant Legal Protections and Prohibitions

Prohibitions Under SEC Memorandum Circulars
- Lending and financing companies are barred from using any abusive, deceptive, or unfair collection practices.
- They are prohibited from posting borrower information on social media to shame them.
- They cannot call or text the borrower’s contacts (family, friends, co-workers) without consent, unless it is to locate the borrower who is genuinely uncontactable. Even then, the nature and frequency of such contact must be reasonable and non-harassing.
Data Privacy Act of 2012
- Lenders must obtain consent for the collection and processing of personal data.
- Unlawful or unauthorized sharing or posting of a borrower’s data violates the Data Privacy Act and can be penalized by the National Privacy Commission (NPC).
- Borrowers may file a complaint with the NPC if their personal data is misused or shared without their consent.
Revised Penal Code (RPC)
- Grave Threats (Article 282): If a collection agent threatens to inflict harm on a borrower’s person or property, criminal charges can be filed.
- Light Threats (Article 283): Lesser forms of threats can also be penalized.
- Unjust Vexation (Article 287, par. 2): Covers repeated annoyance or vexation without valid legal reason.
- Libel or Slander (Articles 353, 358): If a lender publicly defames the borrower, the borrower may explore libel or slander charges.

5. Your Rights as a Borrower

Right to Confidentiality
- Lenders cannot disclose personal information about your debt to unauthorized third parties.
- Your data cannot be published or used beyond the scope of loan collection without your explicit consent.
Right to Fair Treatment
- You must be given the correct information regarding your loan obligations (interest, penalties, payment schedule).
- You have the right to be free from threats, intimidation, or abusive language during the collection process.
Right to Due Process
- You cannot be imprisoned for nonpayment of a purely civil debt.
- A lender can only seek legal remedies through the court (e.g., civil action for collection of sum of money). Even then, you must be given notice and an opportunity to respond.
Right to Seek Redress
- You can file a complaint with the SEC against licensed lending companies engaged in unfair practices.
- You can submit a complaint to the National Privacy Commission (NPC) if your personal data is misused or exposed.
- You can file criminal complaints for threats, libel, or unjust vexation with the Philippine National Police (PNP) or the National Bureau of Investigation (NBI).

6. Steps to Address Harassment

Document Everything
- Keep records of calls, text messages, chat conversations, or emails from the lending company.
- Take screenshots of social media postings if they are shaming or harassing you.
- Note the time, date, and content of each interaction.
Assert Your Rights
- Clearly inform the collection agent that you know your rights and will not tolerate harassment.
- Request that all future communications be done in writing if phone calls are too frequent or abusive.
- If the agent persists in unlawful threats, remind them that their conduct may violate SEC rules and the Data Privacy Act.
File a Formal Complaint
- Securities and Exchange Commission (SEC): For complaints against a registered lending or financing company violating regulations.
- National Privacy Commission (NPC): If there is unauthorized disclosure of your personal information.
- Philippine National Police (PNP)/National Bureau of Investigation (NBI): If you receive serious threats, libelous statements, or harassment that may be criminal.
- Gather evidence (recordings, screenshots) and any supporting documents to substantiate your complaint.
Consider Sending a Demand Letter
- Through a lawyer, you may send a letter warning the lending company to cease and desist from harassment, indicating possible legal action if they do not comply.
Seek Legal Assistance
- Consult a lawyer if the harassment persists or if the lender files a civil suit against you. A lawyer can guide you on how best to respond, protect your rights, and navigate the legal system.
- Public Attorney’s Office (PAO) provides legal assistance to indigent clients who meet certain eligibility criteria.
Alternative Dispute Resolution
- If you wish to amicably settle the debt, consider mediation or negotiation to restructure the loan under fair terms.
- Clear communication and formalizing any new payment plan in writing can help avoid future misunderstandings.

7. Practical Tips to Manage Debt and Avoid Harassment

Maintain Open Communication
- Inform the lender proactively if you are experiencing financial hardship.
- Propose alternative payment schedules or restructuring if you cannot meet the original terms.
Budget and Debt Counseling
- Seek help from financial planners or non-profit organizations offering credit counseling.
- Prioritize essential expenses and explore ways to reduce unnecessary costs.
Review Loan Documents Carefully
- Understand penalty charges, interest accrual, and collection policies from the start.
- Clarify any ambiguous provisions before signing.
Stay Updated on Regulatory Changes
- Check the SEC website or consult legal practitioners for any new memorandum circulars or guidelines that further protect borrowers.

8. Conclusion

Harassment by lending companies is not only unethical but can also be illegal under Philippine law. Borrowers have a range of protections under the Lending Company Regulation Act, SEC rules, the Data Privacy Act, and the Revised Penal Code. Knowing your rights—and the steps you can take to defend those rights—is crucial. From documenting evidence of harassment to filing formal complaints with regulatory bodies, there are effective remedies available.

Ultimately, addressing debt responsibly—by maintaining open communication with your lender, seeking professional advice when necessary, and exploring alternative dispute resolutions—can help manage financial obligations and reduce the likelihood of harassment. If harassment does occur, do not hesitate to invoke the legal protections and processes available to ensure fair treatment and respect for your rights.