Title: How to File a Complaint Against a Lending Company for Harassment and Unlawful Debt Collection Practices (Philippine Context)

Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal advice. For specific concerns and legal strategies tailored to your circumstances, it is best to consult a qualified attorney.

1. Introduction

Debt collection is a legitimate process that creditors or lending companies may pursue when borrowers fail to pay their obligations on time. However, in the Philippines, there are regulations, guidelines, and laws that prohibit harassment and other unfair or unlawful collection practices. If you believe you are experiencing such illegal conduct from a lending company (whether a bank, financing company, or online lender), you have the right to file a complaint and seek legal redress.

This article will explore the relevant Philippine laws, the specific government agencies overseeing these matters, and the step-by-step process to file a complaint against a lending company for harassment and unlawful debt collection practices.

2. Overview of Relevant Laws and Regulations

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 be registered with the Securities and Exchange Commission (SEC) and comply with SEC rules.
- Empowers the SEC to impose sanctions and penalties on lending companies that violate provisions of the act or engage in dishonest or oppressive practices.
Republic Act No. 7394 (Consumer Act of the Philippines)
- Governs consumer protection in general, including credit transactions.
- Protects consumers from deceptive, unfair, and unconscionable sales and credit practices.
Securities and Exchange Commission (SEC) Rules and Memorandum Circulars
- The SEC issues various circulars to regulate lending companies and financing companies, including guidelines on advertising and collection practices.
- Notably, the SEC has released memoranda that penalize abusive or unreasonable collection practices, such as publicly shaming borrowers on social media or contacting third parties without the borrower’s consent.
Data Privacy Act of 2012 (Republic Act No. 10173)
- Protects personal data from unauthorized access and malicious disclosures.
- If a lending company illegally discloses or shares the borrower’s personal information or contacts (for example, calling or sending messages to friends and family members without consent), it could be liable under the Data Privacy Act.
- The National Privacy Commission (NPC) enforces this law.
Philippine Penal Laws (e.g., Revised Penal Code)
- Acts constituting threats, coercion, libel, or unjust vexation may be punished criminally if they meet the elements under the Revised Penal Code.
- Repeated harassment or public humiliation could be categorized as unjust vexation or grave threats.
BSP Circulars and Regulations (for Banks and Financing Institutions)
- Although primarily applicable to banks, certain guidelines on fair debt collection practices exist. If the lending entity is a bank or a BSP-regulated financial institution, you can also refer to these circulars for abusive practices.

3. Recognizing Harassment and Unlawful Practices

Under Philippine law, harassment and unlawful debt collection may include (but are not limited to) the following:

Use of Threats or Violence
- Threatening physical harm or harm to reputation.
- Using foul or abusive language, repeatedly calling at ungodly hours, or causing fear.
Public Shaming
- Posting a borrower’s photo on social media, announcing the debt to the borrower’s friends, family, or workplace.
- Sending messages to acquaintances or posting in public forums about the borrower’s alleged debt to shame or coerce the borrower into paying.
Misrepresentation and Deception
- Impersonating a law enforcement officer, lawyer, or other authority figures to scare the borrower.
- Threatening arrest or criminal charges without the basis.
Unauthorized Disclosure of Personal Information
- Sharing personal details (including contact information, employment details, and credit history) with third parties without the borrower’s prior consent.
- Violating provisions of the Data Privacy Act by accessing or disclosing data without legal basis.
Excessive and Unreasonable Collection Efforts
- Calling or sending messages multiple times a day to the borrower and/or the borrower’s references.
- Using humiliating tactics, e.g., contacting the borrower’s employer or co-workers to pressure payment.
Exorbitant Interest and Hidden Charges
- Although interest rate caps in the Philippines may vary depending on regulations and the type of loan, imposing unusually high interest rates or hidden fees may be subject to regulatory scrutiny.

4. Where and How to File a Complaint

4.1 Securities and Exchange Commission (SEC)

Jurisdiction:
- The SEC is the primary regulatory agency for lending companies and financing companies.
- It has the power to investigate, suspend, or revoke the certificates of authority of companies engaged in illegal or unfair practices.
Grounds for Complaint:
- Violations of the Lending Company Regulation Act (R.A. 9474).
- Abusive collection practices violating SEC rules and circulars.
- Operating without a valid certificate of authority or disregarding required disclosures.
Steps to File:
1. Gather Evidence
  - Keep text messages, emails, voice recordings, screenshots of chats or social media posts.
  - Document dates, times, and content of harassing calls.
  - Secure copies of loan contracts or receipts.
2. Prepare a Complaint Letter
  - Address it to the SEC Enforcement and Investor Protection Department (EIPD).
  - Provide a detailed narration of facts, including the name of the lending company, registration details (if known), and specifics of harassment.
3. Submit Supporting Documents
  - Attach all pieces of evidence (screenshots, call logs, messages).
  - Attach valid identification, your contact details, and the best way to reach you.
4. Wait for SEC Action
  - The SEC may request additional information or conduct an investigation.
  - If the complaint is substantiated, the SEC may impose administrative penalties and order the company to stop its illegal practices.
  - In serious cases, the SEC can revoke the company’s certificate of authority.

4.2 National Privacy Commission (NPC)

Jurisdiction:
- Handles complaints concerning data privacy violations under R.A. 10173 (Data Privacy Act).
- If the lending company illegally accessed, used, or disclosed your personal data or your contacts’ information, this may fall under NPC jurisdiction.
Steps to File:
1. Gather Evidence of Data Privacy Breach
  - Proof of unauthorized disclosure of your personal data or harassment of third parties using your information.
  - Any messages or phone calls evidencing the misuse of personal data.
2. Prepare a Complaint Affidavit
  - State all relevant details, such as how the data was obtained, how it was misused, and the harm caused.
  - Include documentary evidence (screenshots, recordings, sworn statements).
3. File with the NPC
  - Complaints can be submitted through the official NPC email or physically at the NPC office, following their procedures.
  - Provide your contact information for follow-ups.
4. NPC Investigation
  - The NPC will evaluate whether there has been a prima facie violation of the Data Privacy Act.
  - If warranted, the NPC can penalize the offending company or elevate the case for prosecution.

4.3 Department of Trade and Industry (DTI) or Local Consumer Offices

Jurisdiction:
- The DTI generally handles consumer complaints about trade and commerce. If the lending company is engaged in practices that violate consumer protection laws (R.A. 7394), you may lodge a complaint with the DTI or your local consumer protection office.
Steps to File:
1. Check Jurisdiction
  - Confirm that the complaint is consumer-related and not exclusively a lending regulation matter (which is primarily under the SEC).
2. Submit Complaint and Evidence
  - Similar documentation process: detailed written complaint, evidence, personal identification.
3. Mediation or Referral
  - The DTI or local government consumer office might mediate or coordinate with the SEC or other agencies if the complaint involves a specialized area like lending.

4.4 Philippine National Police (PNP) or National Bureau of Investigation (NBI) – Criminal Complaints

Jurisdiction:
- If the collection practices amount to criminal offenses (e.g., grave threats, libel, unjust vexation, or qualified theft of personal information), you may file a criminal complaint with the police or the NBI.
Steps to File:
1. Secure a Sworn Statement
  - Draft a detailed affidavit describing the criminal acts (threats, extortion, etc.).
2. Submit Evidence
  - Provide call recordings, text messages, or other proof of threats or harassment.
3. Investigation and Prosecution
  - The police or NBI will investigate. If they find probable cause, the case may be referred to the prosecutor’s office for filing of criminal charges.

5. Practical Tips Before Filing a Complaint

Organize All Documents and Evidence
- Maintain a clear timeline of events, including dates and times of harassing calls or messages.
Write a Formal Demand or Cease-and-Desist Letter (If Safe to Do So)
- In some cases, informing the lending company that you are aware of your legal rights and that you will take action if they do not stop can deter further harassment.
Avoid Unnecessary Confrontation
- Do not engage in heated arguments or retaliatory threats. Document everything calmly and objectively.
Keep Payment Records
- If you have partially paid or negotiated for a restructuring of the loan, keep these records. This can help show good faith in settling your debt if needed.
Consult a Lawyer
- Particularly if the harassment is severe or the loan amount is substantial, having a lawyer draft your complaint or represent you can expedite the process and ensure your rights are fully protected.

6. Possible Outcomes

Administrative Sanctions
- The SEC may fine or revoke a lending company’s certificate of authority if proven to violate the law or SEC rules.
- The NPC may impose fines and require corrective action for privacy breaches.
Criminal Liability
- If a criminal offense is established (e.g., grave threats, libel), the responsible employees or officers of the lending company may face criminal charges.
Civil Liability or Damages
- In some cases, you may file a civil suit for damages against the lending company if you incurred harm due to their unlawful actions (e.g., reputational damage, emotional distress, or privacy invasion).
Cease and Desist Orders
- The SEC or courts may issue orders stopping the company from continuing harassing or illegal collection practices.
Privacy-Related Relief
- The NPC may order the deletion of improperly collected personal data and ensure the lender implements data protection measures.

7. Frequently Asked Questions (FAQs)

Can I stop paying my debt if the lending company is harassing me?
- No. Harassment by the lender does not extinguish your legal obligation to repay a valid debt. You must still consider settling your obligations. However, you have the right to complain against illegal collection methods and potentially seek relief for damages.
What if the lending company is not registered with the SEC?
- If the entity is not duly registered, it is operating illegally. You can file a report with the SEC’s Enforcement and Investor Protection Department. They may immediately issue a cease-and-desist order or file cases against the unregistered lender.
The lending company keeps contacting my family and friends. Is this allowed?
- Generally, lenders must not harass or threaten non-borrowers. They may only reach out to references for limited verification purposes, but repeated or harassing calls to third parties can violate privacy laws and SEC regulations.
How do I handle repeated phone calls and threatening text messages?
- Document each instance, take screenshots, and save voice mails. This evidence is crucial when filing a complaint. You may also inform your telecommunications provider if the calls violate anti-spam or harassment guidelines.
Can I negotiate directly with the lending company to restructure the loan?
- Yes. While you are dealing with harassment issues, you can also explore settlement or restructuring options. A formal request can sometimes halt aggressive collection and lead to a workable payment plan.

8. Conclusion

Harassment and unlawful debt collection practices have no place in the Philippine financial system. Borrowers, while still responsible for paying legitimate debts, have the right to fair, respectful, and lawful treatment by lenders. Various laws—from the Lending Company Regulation Act to the Data Privacy Act—provide mechanisms to protect you from abusive or fraudulent collection tactics.

If you find yourself subjected to intimidation, threats, unauthorized disclosure of your personal data, or other forms of harassment, do not hesitate to gather evidence, seek legal counsel, and file a complaint with the appropriate government agencies. By understanding your rights and the proper procedures, you can protect yourself from further abuse and help ensure that lending companies uphold ethical and lawful business practices.

For more specific guidance, always consult a licensed attorney or approach your local legal aid organization.