Addressing Harassment from Lending Apps: Legal Guidance for the Philippines

Concern

We have a team member who took out a loan from the lending app Pera Moo. While she can make payments, high interest rates and fees have significantly increased her remaining balance. Additionally, the lending app has been making harassment calls near her due dates. We have decided to assist her in fully paying off the loan. However, we are concerned that this may not resolve the issue entirely, and we want guidance from an attorney to plan our next steps.

∇ Legal Contemplator

Let’s break this down step by step. This is a multi-faceted issue involving financial, legal, and ethical considerations. There are several variables at play, and each deserves close examination.

Foundational Observations: What do we know?

  1. The Loan and App Behavior:

    • The loan originated from a lending app, which suggests an online agreement. This might involve standard terms and conditions commonly found in such platforms.
    • Pera Moo’s behavior involves harassment calls. This could indicate a violation of anti-harassment or consumer protection laws in the Philippines.
    • High interest rates and fees suggest potential predatory lending practices, which are a widespread concern with such apps.

  2. Our Role:

    • The team has decided to assist in paying off the loan. This might mitigate the immediate financial burden but raises questions about whether it truly solves the core issue.
    • We want to prevent future problems, but how do we do that without more leverage or clarity on the legal framework?

  3. Legal Context in the Philippines:

    • The Philippines has laws against unfair debt collection practices. For instance, the Lending Company Regulation Act of 2007 (RA 9474) and the Financial Consumer Protection Act (RA 11765) are relevant here.
    • Data privacy laws, such as the Data Privacy Act of 2012 (RA 10173), may also come into play, especially if harassment involves inappropriate use of personal data.
    • Interest rates for lending companies and fintech apps are regulated, with caps set by the Bangko Sentral ng Pilipinas (BSP) for consumer loans. Are these caps being exceeded?

Digging Deeper: What are the possible pain points?

  1. Predatory Lending:

    • Could the interest rates and fees charged by Pera Moo be considered excessive or illegal? If so, what is the threshold for determining this? Does the BSP have specific guidelines for online lending apps, and does Pera Moo comply with them?
    • If the loan agreement includes vague or hidden clauses leading to exponential growth in balance, can these be challenged in court?

  2. Harassment:

    • What constitutes harassment under Philippine law? The Anti-Harassment Act or other consumer protection frameworks could offer clarity.
    • Is there a pattern of harassment, such as frequent calls, threats, or intimidation? If so, how can this be documented for legal purposes? Evidence might include call logs, text messages, or audio recordings.
    • Could the harassment also violate the Data Privacy Act if sensitive personal information is misused to coerce or intimidate borrowers?

  3. The Full-Payment Decision:

    • If we pay the loan in full, will that eliminate harassment, or could this embolden Pera Moo to pursue further aggressive tactics?
    • Are there risks of additional charges surfacing after payment? Some apps are notorious for claiming processing fees or penalties even post-settlement.

  4. Legal Remedies and Attorney Involvement:

    • Should we file a formal complaint with regulatory authorities, such as the Securities and Exchange Commission (SEC), BSP, or National Privacy Commission (NPC)?
    • How can an attorney assist in negotiating directly with the app or representing the borrower in court, if necessary?
    • What are the chances of success in suing the lending company for damages due to harassment?

Revisiting Assumptions: Am I missing something?

  1. We are assuming the loan can be fully paid without future disputes. Is this overly optimistic? Could predatory lenders find ways to perpetuate the cycle, even after settlement?
  2. There is an assumption that the harassment is illegal. However, could Pera Moo argue that their practices fall within permissible bounds under Philippine law?
  3. By helping pay the loan, are we inadvertently legitimizing any potentially abusive terms and conditions agreed to at the outset?

Possible Approaches: What are the options?

  1. Documentation:

    • Before proceeding with payment, thoroughly document all communications from Pera Moo. Evidence of harassment or unfair practices can support future legal action.
    • Request a formal payoff statement from Pera Moo, detailing the total amount due and confirming that no additional fees will accrue after settlement.

  2. Regulatory Complaint:

    • File a complaint with the SEC, which oversees lending companies. Highlight predatory practices and harassment.
    • Consider reporting privacy violations to the NPC if personal information has been misused.

  3. Legal Consultation:

    • Consult with an attorney specializing in financial consumer protection or data privacy laws. This can help in drafting a demand letter to Pera Moo, insisting they cease harassment and provide a clear resolution upon payment.
    • Discuss the feasibility of suing for damages or seeking injunctive relief if harassment persists.

  4. Settlement with Conditions:

    • Negotiate a settlement agreement before full payment. Ensure it includes a clause absolving the borrower of any further financial or legal obligations to Pera Moo.

Acknowledging Uncertainties: What don’t we know yet?

  • We don’t have full visibility into Pera Moo’s compliance with BSP regulations. Are they licensed, and do they operate within the law? This could impact the legal strategies available to us.
  • Are there other borrowers experiencing similar issues? If so, could this lead to a potential class action against Pera Moo?

Final Answer:

  1. Step 1: Document all harassment and obtain a detailed payoff statement from Pera Moo.
  2. Step 2: Consult an attorney experienced in financial consumer protection laws. Consider filing complaints with the SEC and NPC to address predatory practices and harassment.
  3. Step 3: Negotiate a settlement agreement ensuring no additional charges post-payment.
  4. Step 4: If harassment persists or if predatory practices are evident, explore legal action against Pera Moo, including potential damages for harassment.

This approach balances immediate resolution with long-term protection, leveraging legal remedies and regulatory oversight to address systemic issues.

Disclaimer: This content is not legal advice and may involve AI assistance. Information may be inaccurate.

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