Legal Remedies for Harassing Online Lending Apps in the Philippines
An Overview of Rights, Regulations, and Enforcement

In recent years, the proliferation of mobile lending applications in the Philippines has made borrowing money faster and more convenient. However, various reports and complaints also indicate that certain online lending platforms resort to harassing, abusive, or illegal debt collection practices once borrowers default or are late in their payments. Such practices include unauthorized sharing of personal information, threats, repeated and excessive calls, false publication of one’s name, and other tactics aimed at shaming the borrower.

This article provides an overview of the legal framework surrounding the use of harassing tactics by online lending apps in the Philippines, the roles of various government agencies, and the legal remedies available to borrowers.

1. Relevant Laws Governing Online Lending and Debt Collection

1.1. The Consumer Act of the Philippines (R.A. No. 7394)

Although the Consumer Act is broader in scope, it recognizes consumers’ rights to fair and equitable treatment. While it does not specifically address digital lending platforms, the overarching policy that consumer rights are protected against abusive business practices applies here.

1.2. Data Privacy Act of 2012 (R.A. No. 10173)

One of the most commonly cited laws in cases of online lending harassment is the Data Privacy Act (DPA). Under the DPA, personal information controllers (such as lending companies) must process personal data fairly and lawfully. They are prohibited from processing or disclosing personal information beyond the scope of the borrower’s consent.

Violations of the DPA can occur when:

Lending apps access contacts stored on a borrower’s phone without explicit and informed consent.
Debt collectors disclose personal data (such as outstanding balances) to the borrower’s contacts or social media networks without legal basis.
Malicious or unauthorized use of personal data to harass or shame borrowers.

1.3. Revised Penal Code (RPC)

Certain debt collection tactics can be considered crimes under the Revised Penal Code. Depending on the nature of the harassment, online lenders or their agents may be liable for:

Grave Threats (Article 282) – making threats of unjust or unlawful injury to a borrower’s person, honor, or property.
Grave Coercion (Article 286) – forcing someone to perform an act (e.g., pay debt immediately) through violence, intimidation, or threats.
Unjust Vexation (Article 287) – causing annoyance, irritation, or torment that is not specifically covered by other specific offenses.

1.4. Cybercrime Prevention Act of 2012 (R.A. No. 10175)

If the harassment involves electronic means – such as malicious threats, defamation, or unauthorized access to devices – the Cybercrime Prevention Act may come into play. This law penalizes online libel, identity theft, cyber threats, and other related offenses.

1.5. BSP, SEC, and Other Regulatory Guidelines

Online lending platforms usually fall under the regulatory jurisdiction of either:

Bangko Sentral ng Pilipinas (BSP) – if they are recognized as lending or financing companies under BSP-supervised frameworks.
Securities and Exchange Commission (SEC) – regulates lending companies and their conduct of business, pursuant to the Lending Company Regulation Act of 2007 (R.A. No. 9474) and related circulars.

The SEC has also issued numerous advisories and memoranda regarding unethical lending practices, such as Memorandum Circular No. 18, s. 2019, which specifically addresses unfair debt collection practices by financing and lending companies.

2. Harassment Tactics Employed by Some Online Lenders

Borrowers’ complaints generally revolve around the following common practices:

Unauthorized Access to Contacts
Lending apps sometimes require borrowers to allow access to their phone contacts before granting loans. These contacts are later used to contact friends and family, or to threaten to disclose the borrower’s “unpaid debt,” leading to embarrassment or reputational harm.
Sending Threatening Messages
Borrowers receive repeated, menacing messages via text, instant messaging, or social media. Such threats may include public shaming, blacklisting, or even legal repercussions that are often exaggerated or baseless.
Shaming or Humiliating the Borrower
Some debt collectors create social media groups or send out mass messages labeling a borrower as a “delinquent” or “scammer.” These methods are intended to pressure the borrower through humiliation.
Excessive or Repeated Calls
Calls at all hours of the day and night to the borrower and their contacts can amount to harassment, distress, and undue anxiety.

3. Legal Remedies and Enforcement

3.1. Filing a Complaint with the National Privacy Commission (NPC)

Given that many abuses hinge on data privacy violations (e.g., unauthorized access or disclosure of personal information), the National Privacy Commission is often the first recourse. The NPC can investigate and penalize erring companies if they find violations of the Data Privacy Act.

Steps to File a Complaint with the NPC:

Document the Harassment: Take screenshots of text messages, gather call logs, and document any social media messages.
Send a Letter of Complaint to the Violator: The NPC typically requires that the aggrieved party first try to contact the company or “personal information controller” to exercise their rights or seek resolution.
Complete the NPC Complaint Form: Provide details of the harassment, alleged data privacy violations, and relief sought.
Submit Evidence: Submit proof of unauthorized disclosures or harassing messages.
NPC Investigation: The NPC may conduct hearings or mediations and impose administrative fines or other penalties if violations are proven.

3.2. Filing a Case with the Securities and Exchange Commission (SEC)

If the offending entity is a lending or financing company registered with the SEC, borrowers may file a complaint with the SEC Enforcement and Investor Protection Department. The SEC can impose fines, suspend or revoke licenses, and penalize lending companies found to be engaged in unfair debt collection practices.

3.3. Criminal Complaints Under the Revised Penal Code and Cybercrime Laws

Where there is sufficient basis to claim threats, coercion, or unjust vexation, borrowers can file a criminal complaint with the Office of the City Prosecutor. If the harassment occurs through electronic means, possible violations under the Cybercrime Prevention Act (e.g., cyber libel, illegal access, cyber threats) may also be raised.

Gather Evidence – Logs of calls, text messages, or screenshots of social media posts.
Execute an Affidavit – A sworn statement containing all pertinent details about the harassment.
File with the Prosecutor’s Office – The complaint should cite specific penal provisions under the Revised Penal Code or the Cybercrime Prevention Act.
Preliminary Investigation – The prosecutor’s office will determine if there is probable cause to charge the lender or collector.

3.4. Civil Actions for Damages

Some borrowers opt to file a civil case for damages (e.g., moral, nominal, or even exemplary damages) if they have suffered mental anguish, sleepless nights, humiliation, or reputational injury because of the lender’s actions. This is filed before the regular courts, and the complainant must prove that they suffered damages attributable to the lender’s unlawful conduct.

3.5. Injunction or Restraining Orders

In certain extreme cases where the harassment is continuous and severely injurious, it may be possible to apply for a temporary restraining order (TRO) or writ of injunction in court to prohibit the lender or its agents from continuing such abusive practices.

4. Best Practices for Borrowers Facing Harassment

Collect and Preserve Evidence
Create a file of screenshots, call logs, chat threads, and other relevant evidence of harassment. This is crucial for any future legal or administrative complaints.
Know Your Rights Under the Data Privacy Act
Review the privacy policies and terms of any online lending app. If the app’s collection of data goes beyond what you explicitly consented to, this is a strong basis for a complaint.
Demand for Proper Debt Collection Practices
Under various SEC circulars, lending and financing companies must comply with fair collection practices that prohibit the use of violence, threats, obscene language, or public humiliation.
Cease-and-Desist Letters
Before escalating, consider sending a written demand (often through a lawyer) asking the lender to stop the harassment. Such a letter may become part of evidence if the misconduct continues.
Seek Legal Advice
Especially if intimidation escalates, consult with a lawyer or a legal aid organization to evaluate possible causes of action. They can guide you through filing complaints before the NPC, SEC, or courts.
Check SEC Advisories
The SEC often issues advisories listing companies that operate without authority or that have had their licenses revoked. Verify the credentials of the lending app in question.

5. Conclusion

The rise of online lending platforms in the Philippines offers convenience but also presents serious risks when these companies resort to unethical and illegal debt collection practices. Borrowers are not without recourse: the Data Privacy Act, Revised Penal Code, SEC rules, and even civil law remedies provide avenues for redress. Crucially, individuals facing harassment should gather and preserve evidence, understand their legal rights, and file complaints with the proper agencies – such as the National Privacy Commission and the Securities and Exchange Commission – or pursue criminal and civil actions if warranted.

Given the increasing frequency of harassment cases, both regulators and courts are keenly aware of abusive practices in the digital lending space. As awareness grows, the legal tools and mechanisms to safeguard borrowers’ rights are also becoming more robust. Ultimately, any borrower experiencing harassment from an online lending app should stand firm on their rights, document all incidents of abuse, and seek the protection of the law to hold violators accountable.