Filing a Complaint Against a Lending App for False Information

Concern:

Hello, good morning. I would like to ask if it is possible to file a complaint against a lending app for false information they provided. In their video advertisement, they claimed a loan interest of only 0.025% and allowed repayment in 12 installments. However, when I applied for the loan, I was shocked to find that the actual repayment terms were two repayments per week, and the interest would amount to 7% per day if the loan is not paid on time. What should I do?

∇ Legal Contemplator

Step 1: Understanding the Basics of Lending Laws in the Philippines

Let’s start by understanding the legal framework. Lending companies in the Philippines are regulated by laws such as the Lending Company Regulation Act of 2007 (RA 9474) and related issuances from the Bangko Sentral ng Pilipinas (BSP) and the Securities and Exchange Commission (SEC). One specific requirement is transparency in lending practices.

Truth in Lending Act (RA 3765): Lending institutions must disclose all charges and terms of the loan, such as interest rates, fees, and the repayment schedule, clearly and accurately before a borrower enters into an agreement.
False advertising or misrepresentation is strictly prohibited under these laws.

At this point, I wonder: are the claims of 0.025% interest and 12 installments legally binding since they were made in a video advertisement? Would this advertisement be considered an explicit offer under the law? Or could the company argue it was merely promotional material?

Step 2: Assessing Misrepresentation

Misrepresentation occurs when false or misleading information is provided to influence a decision. But is there a distinction between intentional deception and mere negligence in advertising? Here, the specifics matter:

Did the video clearly indicate that the terms applied universally? Ambiguities might weaken a complaint.
Was the video ad formally approved by the company or made by an affiliate?
Did the app’s terms and conditions contradict the ad? Fine print might shield the lender legally, but does this undermine the spirit of the Truth in Lending Act?

One might think, “Is this really actionable, or will it just get dismissed?” The key lies in establishing that the false information was significant enough to affect your decision-making.

Step 3: What Are the Remedies Available?

You want justice, but what specific outcomes are possible here? Several avenues could be explored:

Filing a complaint with the SEC. The SEC has a history of investigating predatory lending practices.
Lodging a complaint with the Department of Trade and Industry (DTI). If the false advertisement constitutes deceptive marketing, the DTI could investigate.
Filing a case under the Consumer Act (RA 7394). The Consumer Act protects individuals from false or misleading advertisements.
Direct legal action. Civil remedies for fraud or misrepresentation might apply, but this path requires resources and legal representation.

But how feasible are these paths? The SEC and DTI are accessible, but they are often overwhelmed with cases. Direct legal action might be intimidating for a single borrower. Should I prioritize practicality over principle here?

Step 4: How to Prove the Misrepresentation

If you want to file a complaint, evidence is crucial. But how do we ensure the complaint stands on solid ground?

Documentation of the ad. Do you have a copy of the video? If not, can it be retrieved from online platforms?
Comparison with actual terms. Screenshots or documents showing the real terms of the loan are critical.
Other victims. Can you find others who experienced the same issue? A collective complaint carries more weight.
Correspondence with the lender. Were the discrepancies raised with them? Their response (or lack thereof) matters.

I pause to consider: will gathering this evidence be a manageable task for you, or will it deter you from proceeding? Perhaps focusing on accessible complaints mechanisms, like the SEC, is a more efficient use of time.

Step 5: Exploring the Nature of the Lending App

I should also ask: is this lending app even legitimate?

Is it registered with the SEC? If not, that’s a major violation already.
Does it comply with the BSP’s rules on lending interest caps? Excessive interest rates are explicitly prohibited by law. The Bayanihan to Recover as One Act (RA 11494) also capped interest rates during the pandemic, though the current situation depends on when the loan was applied for.
Have there been previous complaints about this app? Researching its reputation could strengthen your case.

Now I wonder: is this truly about misrepresentation, or is it indicative of broader predatory practices? Should we shift focus from false advertising to systemic abuse?

Step 6: Ethical Concerns and Broader Implications

Even if you win your case, will it set a precedent? Lending apps have been under scrutiny for harassing borrowers and predatory lending. Your case could contribute to broader reform. However, does pursuing justice in your specific case risk exhausting you without meaningful change?

Maybe a strategic approach would be to combine your complaint with a public call for regulatory enforcement. But would this subject you to retaliation from the company?

Final Thoughts

This situation feels more complex than a straightforward complaint. It’s about individual justice and systemic accountability. I keep circling back to one question: what outcome do you truly want, and how much effort can you dedicate to achieving it?

Final Answer:

Yes, you can file a complaint against the lending app for false information. Here are your recommended steps:

Gather Evidence: Secure a copy of the video ad and screenshots of the actual loan terms. Document all correspondence with the app.
Check Registration: Confirm if the lending app is registered with the SEC. If not, report this immediately to the SEC.
File Complaints:
- File a complaint with the SEC for violations of lending regulations.
- Lodge a complaint with the DTI for deceptive advertising.
- Consider filing a consumer complaint under the Consumer Act for false or misleading information.
Seek Community Support: If others have faced similar issues, a collective complaint may carry more weight.
Explore Legal Assistance: If resources permit, consult with a lawyer to consider direct legal action for misrepresentation.