Reporting Harassing Online Lending Apps for Unfair Collection Practices in the Philippines

Online lending apps have gained popularity in the Philippines due to their quick and convenient loan services. However, a growing number of borrowers have raised complaints about unfair and harassing collection practices employed by some of these apps. Incidents range from relentless text messages and phone calls to personal data breaches and public shaming. This article provides a comprehensive overview of your rights as a borrower, the legal framework protecting you, and the available mechanisms for reporting harassment by online lending applications.

1. Background and Overview

1.1 Rise of Online Lending Apps

Fast and easy loans: Online lending platforms offer quick approvals and minimal documentation, attracting many borrowers.
Wide digital reach: Through social media advertising and user-friendly apps, these lending companies reach borrowers who may not have immediate access to traditional bank loans.
Risk of abusive practices: Because of their digital nature and limited regulatory track record, some online lending apps resort to predatory or harassing methods to collect debts.

1.2 Common Harassment Techniques

Excessive calling and messaging: Borrowers may receive non-stop calls or texts, sometimes late at night or during early mornings, causing mental and emotional distress.
Unauthorized data access: Some lenders access a borrower’s contact list without explicit permission and send messages to family, friends, and work colleagues.
Threats and intimidation: Borrowers might be threatened with lawsuits, public embarrassment, or damage to credit scores if payment deadlines are missed.
Social media shaming: Posting defamatory content on social media or sending malicious messages to a borrower’s personal and professional contacts.

2. Legal Protections Under Philippine Law

2.1 The Data Privacy Act of 2012 (Republic Act No. 10173)

Personal data protection: The Data Privacy Act protects individuals from unauthorized collection, processing, and disclosure of personal data.
Consent requirement: Companies must obtain informed consent before collecting or using personal information beyond the agreed purposes.
Right to object: Borrowers can refuse or withdraw consent if personal data is processed unfairly or unlawfully.
Complaints process: The National Privacy Commission (NPC) enforces data privacy regulations. Borrowers may file a complaint with the NPC if a lending app misuses personal data.

2.2 The Securities and Exchange Commission (SEC) Regulations

Licensing of lending/financing companies: Under the Lending Company Regulation Act (Republic Act No. 9474) and related SEC regulations, lending companies must be registered with the SEC.
SEC Memorandum Circulars: The SEC has issued guidelines and memorandums prohibiting unfair collection practices.
Administrative sanctions: The SEC can penalize and revoke licenses of registered lending companies engaged in abusive collection tactics.

2.3 Other Relevant Laws

Revised Penal Code (RPC): Some harassing actions, such as grave threats or libel, may be criminally prosecuted under the RPC if they involve threats of violence or public ridicule.
Cybercrime Prevention Act of 2012 (Republic Act No. 10175): Online harassment or the unauthorized disclosure of personal data may be prosecuted as cyber offenses.
Consumer Act of the Philippines (Republic Act No. 7394): Although this law focuses on consumer protection, certain abusive tactics may be seen as unfair or deceptive trade practices.

3. Recognizing Unfair Collection Practices

The following are recognized as unfair or abusive collection practices:

Using or threatening violence or harm
Public shaming or disclosing debt information to third parties (e.g., contacting friends, relatives, co-workers)
Repeated phone calls at unreasonable hours (e.g., before 8 AM or after 9 PM)
Misrepresenting the amount of debt owed
Using false claims of legal or criminal action

If a lending app engages in any of these practices, it may be violating SEC regulations, data privacy laws, or even criminal laws, depending on the circumstances.

4. How to Document and Build Your Case

Save all communications: Keep copies of emails, text messages, and chat logs showing the threatening or harassing statements.
Record phone calls (if possible): If you are able to record phone calls under applicable consent requirements, these recordings may serve as valuable evidence. However, be mindful of the two-party consent rule in some jurisdictions.
Note dates and times: Keep a diary or log of every call or message, including the date, time, phone number, and nature of the communication.
Take screenshots: If the harassment occurs via social media (e.g., Facebook posts, Messenger, or Viber), take screenshots for evidence.
Collect witness statements: If any third parties (such as family members, co-workers, or friends) receive harassing messages, ask them to document what they received and when.

5. Filing a Complaint

5.1 National Privacy Commission (NPC)

When to file: If the lending app accesses or exposes your personal data without your consent, or continues to process your information unlawfully.
How to file:
- Visit the NPC website (for updated instructions).
- Write a complaint letter detailing the data privacy violation.
- Attach supporting documents (screenshots, affidavits, etc.).
NPC procedures: The NPC will review your complaint, launch an investigation, and may hold mediation hearings.

5.2 Securities and Exchange Commission (SEC)

When to file: If the lending company is registered with the SEC but engages in unfair collection practices or violates SEC circulars.
How to file:
- Check the SEC website or contact them directly for complaint forms and instructions.
- Provide evidence of harassment (texts, call logs, screenshots).
Possible outcomes: The SEC may impose fines, suspend or revoke the lending company’s license, or issue cease and desist orders.

5.3 Local Police, NBI Cybercrime Division, or PNP Anti-Cybercrime Group

Criminal offenses: If the conduct involves grave threats, extortion, cyber libel, or other criminal acts under the Revised Penal Code or Cybercrime Prevention Act.
Evidence submission: Present printouts, screenshots, recordings, and any other relevant proof.
Investigation and prosecution: Once the police or NBI finds probable cause, they can file the appropriate criminal charges.

5.4 Small Claims Court / Civil Litigation

Possible if you suffer damages: If the harassment led to reputational or monetary harm, you may consider filing a civil case for damages.
Small claims: The Philippine small claims court can be a faster, less expensive venue for resolving monetary claims if the amount claimed is within the limit set by the Supreme Court’s guidelines.

6. Dealing with the Harassment While the Case is Ongoing

Assert your rights: Politely but firmly inform the collector that their actions violate the law.
Limit communication: You have the right to limit how and when they contact you; consider sending a formal request in writing or email.
Block phone numbers and accounts: While it may not fully stop the harassing behavior, it can reduce stress levels while you pursue legal remedies.
Seek support: Emotional support from friends and family can help you cope with stress; legal advice from lawyers or civic organizations can guide you through the complaint process.

7. Preventive Measures and Best Practices

Read terms and conditions: Before installing any lending app, carefully review its data-sharing policies and collection practices.
Check licensing: Verify through the SEC if the lending company is duly registered.
Monitor credit: Regularly check credit reports (if available) to ensure accurate loan entries are reflected.
Keep payments on track: Timely repayment (if feasible) helps avoid collection calls altogether, although financial hardship may not always make this possible.
Seek financial advice: If you are repeatedly reliant on short-term loans, explore alternative strategies such as budgeting or government microfinance programs.

8. Conclusion

Harassing behavior from online lending apps can be distressing, but Philippine laws and regulatory bodies offer strong protections for borrowers. The Data Privacy Act of 2012, the relevant SEC regulations, the Cybercrime Prevention Act, and other legal provisions all work in tandem to protect consumers from abusive collection practices.

If you or someone you know faces harassment from an online lending app, it is crucial to document all instances of abuse, contact the appropriate government agencies, and consider seeking legal advice. By remaining informed about your rights and available recourse, you can protect yourself from unlawful debt collection tactics and hold violators accountable.

Disclaimer: This article provides a general overview and should not be construed as legal advice. If you need specific guidance on a particular situation, consult a qualified attorney or contact the relevant Philippine government agencies for assistance.