Letter from a Concerned Borrower

Dear Attorney,

I hope this letter finds you well. I am a concerned borrower who has recently experienced repeated harassing phone calls from a lending institution. These calls, which occur at various times of day, have become a source of distress and anxiety. I am uncertain about the legal remedies available to protect myself from such intrusive and distressing conduct, and I would greatly appreciate your guidance.

Specifically, I would like to understand: (1) what legal standards or regulations in the Philippines govern the conduct of lending companies when communicating with borrowers; (2) what constitutes harassment or unfair debt collection practices; and (3) what steps I can take, including filing complaints with appropriate agencies or pursuing legal action, to put an end to these unwanted calls. Any insights you can provide on how best to proceed would be invaluable.

Thank you for your time and counsel.

Sincerely,
A Concerned Borrower

A Comprehensive Legal Article on the Philippine Legal Framework Addressing Harassing Calls by Lending Companies

Introduction

Harassing calls from lending companies have become an increasingly common concern in the Philippines, particularly as consumer lending and microfinance operations have proliferated. In a jurisdiction where consumer protection legislation, data privacy frameworks, and various regulatory measures intersect, borrowers subjected to harassing telephone calls have recourse to a range of legal and administrative remedies. This article will discuss in meticulous detail all that a concerned borrower should know when dealing with harassing calls from lending entities. It will cover the relevant laws governing debt collection practices, define the standards and limits placed upon lenders and their agents, outline the processes for filing complaints or seeking legal remedies, and highlight various jurisprudential or regulatory directives from agencies such as the Securities and Exchange Commission (SEC), the Bangko Sentral ng Pilipinas (BSP), and the National Privacy Commission (NPC).

I. The Legal and Regulatory Framework

Consumer Protection and Financial Lending Practices:
The Philippines has made strides in strengthening consumer protection laws, including those that govern the credit and lending industry. Relevant statutes and regulations include the Consumer Act of the Philippines (Republic Act No. 7394), which sets forth general consumer protections, and the recently enacted Financial Products and Services Consumer Protection Act (Republic Act No. 11765), which grants regulatory agencies greater authority to protect financial consumers against abusive and unethical practices by lenders.

While RA 7394 establishes broad consumer rights against deceptive and unfair trade practices, RA 11765 focuses on financial products and services, including lending. Under RA 11765, financial regulators such as the BSP, SEC, and the Insurance Commission (IC) have enhanced powers to issue rules, conduct examinations, address complaints, and impose sanctions on erring financial service providers.
Data Privacy and Unsolicited Communications:
The Data Privacy Act of 2012 (Republic Act No. 10173) provides a legal framework for the protection of personal data. Although it does not expressly prohibit repeated calls regarding debt collection, it does set standards for the lawful processing of personal information. If a lending company uses personal data (e.g., a borrower’s phone number) in a manner that violates data subject rights—such as calling at unreasonable hours or using collected data for purposes not originally consented to—this may amount to a violation of the Data Privacy Act. The National Privacy Commission has issued various advisories and may mediate or adjudicate complaints involving misuse of personal data or breaches of data protection principles.
Revised Penal Code and Related Offenses:
In certain circumstances, the harassment arising from collection calls may cross into the realm of criminal liability under the Revised Penal Code. While there is no direct penal provision solely for “harassing calls,” persistent and threatening behavior could be treated as unjust vexation or grave threats, depending on the specifics of the conduct. Although resorting to criminal law remedies tends to be more complex, they can be invoked when the collector’s methods become overtly threatening, libelous, or involve intimidation.
BSP and SEC Regulations on Lending and Financing Companies:
The BSP regulates banks and certain financial institutions, while the SEC has oversight over lending and financing companies. Through various circulars, memoranda, and rules, these regulators set standards for ethical debt collection. For instance, lending companies must follow guidelines that prohibit the use of violence, intimidation, threats, insults, or the publication of names of delinquent borrowers. Any communication that constitutes harassment, abuse, or unfair debt collection practice may be sanctioned. An example is SEC Memorandum Circular No. 18, Series of 2019, which provides the Rules and Regulations on Financing Companies and Lending Companies. This memorandum and others like it codify prohibitions against threatening or harassing borrowers.
Local Ordinances and Alternative Dispute Resolution:
Some local government units (LGUs) may have ordinances relating to nuisance calls or harassment. In addition, the Katarungang Pambarangay system and mediation or arbitration forums offer alternative channels for resolving disputes before resorting to judicial action. These alternative mechanisms are less formal, potentially less costly, and can produce quicker outcomes.

II. Defining Harassing Calls in the Context of Debt Collection

To determine whether a lender’s conduct rises to the level of harassment, consider the frequency, timing, and nature of the calls. Calls made late at night, early in the morning, or with excessive frequency—such as numerous calls within a short period—can be harassing. Additionally, the content of the calls matters: if the caller uses threatening language, employs profanity, demeans, intimidates, or discloses private information about the borrower to third parties (such as employers, relatives, or friends), these elements support a finding of harassment.

Harassment may also include repeated attempts to contact a borrower at their workplace despite requests to refrain, public shaming of borrowers on social media or community bulletin boards, or impersonation of law enforcement officials or government agents to pressure payment. These unethical and unlawful methods can give rise to both administrative and legal consequences for the lending entity and its agents.

III. Legal Recourses and Complaints Process

Filing a Complaint with the SEC or BSP:
If the lender is registered with the SEC, the borrower may submit a formal complaint to the SEC’s Enforcement and Investor Protection Department. The complaint should include details of the harassing calls, including dates, times, phone numbers used, and the content of the communications. Likewise, if a bank or a financial institution regulated by the BSP is involved, a complaint may be filed with the BSP’s Financial Consumer Protection Department. Supporting evidence, such as call logs, screenshots of messages, or recorded calls (if lawfully obtained), can strengthen the complaint.
Approaching the National Privacy Commission (NPC):
If the borrower suspects that the lending company mishandled their personal data, leading to harassment, a complaint may be filed with the NPC. The NPC can investigate potential data privacy violations, order the cessation of unfair practices, and impose penalties or fines on violators. To do this, the borrower should gather documentation that shows misuse of personal data, such as unauthorized sharing of contact details or repeated marketing messages after a request to cease.
Civil Actions for Damages:
Borrowers who suffer emotional distress, reputational harm, or other injuries due to harassment may file a civil case for damages under the Civil Code. Provisions regarding moral damages (Articles 2217-2220 of the Civil Code) could apply if the lender’s conduct is shown to have caused mental anguish, embarrassment, or serious anxiety. In such suits, the borrower must prove the wrongdoing, the nature and extent of the damage, and the causal connection between the harassment and the harm suffered.
Criminal Complaints for Grave Threats, Unjust Vexation, or Other Offenses:
Should the calls contain explicit threats against life, property, or reputation, the borrower may consider filing a criminal complaint. Unjust vexation, as defined in jurisprudence, may apply to repeated acts that cause annoyance or distress without lawful purpose. Although this approach can be more challenging due to the burdens of proof and the standards required by criminal law, it remains an option for borrowers who face severe harassment.
Barangay Conciliation and Alternative Dispute Resolution (ADR):
Before pursuing formal legal action, borrowers can attempt barangay conciliation under the Local Government Code or seek the help of ADR mechanisms. Barangay officials often mediate disputes between borrowers and lenders, encouraging an amicable settlement. Although not always successful, this approach can prevent escalating legal costs and formal litigation. ADR methods such as mediation or arbitration may be voluntarily agreed upon by both parties in their lending agreements.

IV. Procedure and Strategies for the Affected Borrower

Gathering Evidence:
A borrower who experiences harassing calls should maintain a log detailing each call. This log can include the date, time, originating phone number, name of the caller (if provided), a summary of what was said, and any actions taken by the borrower in response (such as requesting the caller to stop). Additionally, if the borrower’s phone system or mobile device allows it, lawfully recording calls—after ensuring compliance with the Anti-Wiretapping Law (Republic Act No. 4200), which requires consent of at least one party to the conversation—may serve as evidence. Always consult legal counsel before recording calls to ensure compliance with Philippine law.
Written Notices to the Lending Company:
Borrowers may send a formal written demand to the lending company, requesting that all harassing calls cease immediately. This notice can be served through registered mail or courier and should reference the borrower’s account, state the nature of the harassment, and demand the cessation of such conduct. A well-documented paper trail can strengthen the borrower’s position in subsequent complaints or litigation.
Seeking Assistance from a Lawyer:
Engaging a qualified lawyer who understands consumer protection and lending laws can greatly assist the borrower in navigating the complaints process. Legal counsel can help draft complaint letters, advise on whether to approach the SEC, BSP, or NPC first, and represent the borrower in civil, administrative, or criminal proceedings.
Pursuing Consolidated Actions:
If multiple borrowers are experiencing similar harassment from the same lender, they may consider joining forces. Collective actions, while not as common in the Philippines as in some other jurisdictions, may still be possible under certain conditions. This approach can strengthen the bargaining power of complainants and potentially attract greater attention from regulators or the media.

V. Regulatory and Judicial Attitudes

Recent years have seen growing recognition by regulators of the need to curb abusive lending practices. Publicized cases of unethical, aggressive, or harassing debt collection methods by online lending apps and traditional lenders have prompted stricter regulatory oversight and public advisories. The SEC has warned lenders against using harassment or shaming borrowers. Similarly, the NPC has cracked down on online lending platforms that access a borrower’s contact list to contact friends or relatives, a practice seen as invasive and harassing.

Judicial attitudes also reflect an understanding that borrowers, while obliged to repay their debts, deserve protection from unscrupulous collection methods. Courts have recognized the importance of safeguarding consumers’ rights and have not hesitated to award damages for moral or exemplary purposes in appropriate cases. Although the jurisprudence on harassment specific to telephone calls remains relatively scant, general principles from consumer protection, privacy, and tort law guide courts in determining liability and awarding remedies.

VI. Preventive Measures and Best Practices for Borrowers

While the onus primarily lies on lending institutions to follow the law, borrowers can take proactive steps:

Read and Understand Loan Agreements:
Before borrowing, carefully review the terms and conditions of the loan agreement. Some contracts may include clauses about how the lender will contact the borrower in case of default or delay in payment. Understanding these terms can help borrowers anticipate and recognize when the lender crosses the line into harassment.
Assert Your Rights Early:
The moment calls become excessive or distressing, inform the lender that their conduct is unwelcome and request all further communication be made in writing or through a mutually agreed-upon channel. Sometimes, simply making it clear that you know your rights can deter unscrupulous behavior.
Maintain Good Faith and Communication:
Borrowers should also act in good faith. If facing financial difficulties, proactively communicate with the lender about restructuring options, alternative payment plans, or temporary moratoria. Engaging in good-faith negotiations can sometimes prevent the escalation of tensions and reduce the likelihood of harassing calls.

VII. Conclusion

Dealing with harassing calls from a lending company in the Philippines involves understanding a network of laws, regulations, and administrative frameworks designed to protect borrowers from unfair practices. Though the country does not have a singular “harassing calls” statute specific to debt collection, a combination of consumer protection laws, data privacy regulations, and general provisions of civil and criminal law serve as potent tools for borrowers seeking relief.

A borrower who experiences such harassment should approach the situation methodically: document the calls, send a written demand to cease the harassment, file complaints with the appropriate regulatory agencies, consider civil or criminal actions if warranted, and seek the guidance of competent legal counsel. As the regulatory environment continues to evolve and public sentiment strongly supports the protection of consumers, borrowers stand on increasingly solid ground when confronting abusive debt collection tactics.

By leveraging the legal remedies discussed herein, a borrower can assert their rights, hold lenders accountable for their conduct, and restore peace and dignity to the process of debt repayment. In so doing, the borrower not only seeks personal redress but also contributes to the broader development of a fairer, more ethical financial environment in the Philippines.