Dear Attorney,

Good day! I hope this message finds you well. I would like to seek your legal assistance regarding a matter involving harassment from online lending companies. These lenders have been persistently contacting me through calls, texts, and social media, and their methods have become invasive, unprofessional, and extremely stressful. They have also started contacting my family, friends, and colleagues, which is causing me much distress and embarrassment.

I have heard that this kind of harassment is unlawful under Philippine law, and I would like to understand the legal remedies available to me. Could you kindly provide me with advice on how to file a formal complaint or any other legal action to stop this behavior? I am very concerned about protecting my privacy and preventing further harm.

I would be grateful for any guidance you can offer on this matter.

Thank you in advance for your assistance.

Sincerely,
A Concerned Borrower

Legal Remedies Against Harassment by Online Lending Companies in the Philippines

Introduction

In the Philippines, online lending platforms have rapidly proliferated due to the rise of technology-driven financial services. While these services provide convenient access to credit for many Filipinos, they have also given rise to numerous complaints of harassment and unfair collection practices. Borrowers often report excessive and invasive measures employed by these lenders to collect debts, including threatening messages, public shaming, and even contacting third parties such as family members or colleagues to pressure repayment. These practices not only violate ethical standards but may also be unlawful under various Philippine laws.

This article aims to provide an in-depth discussion of the legal framework governing the rights of borrowers facing harassment from online lending platforms and the remedies available to them under Philippine law.

Legal Framework on Harassment in Debt Collection

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

One of the primary legal instruments that can be invoked in cases of harassment by online lenders is the Data Privacy Act of 2012 (DPA). This law protects individuals from unauthorized and intrusive processing of personal information.

Key Provisions Relevant to Harassment:

Unauthorized Disclosure of Personal Data: Online lending companies often resort to publicly shaming borrowers by posting their names and debt information on social media or sending such information to their contacts without consent. Under the DPA, such actions are illegal if they involve the unauthorized disclosure of personal data.
Principle of Proportionality: The collection and use of personal information must be proportional to the purpose for which it was obtained. Lenders can only process data that is necessary for legitimate purposes, such as evaluating creditworthiness or facilitating repayment. Any use of personal data beyond this scope, such as using it to harass or shame the borrower, is a violation of the DPA.
Right to Erasure or Blocking: Borrowers have the right to request the removal of personal data that is unlawfully obtained or is no longer necessary for the purpose for which it was collected. If the lender continues to harass the borrower using personal information, the borrower may request the National Privacy Commission (NPC) to enforce their right to erasure or blocking of such data.

Penalties: Violations of the DPA can result in fines and imprisonment. A lender found guilty of unauthorized processing of personal data can face up to seven years of imprisonment and a fine of up to PHP 5,000,000, depending on the nature and extent of the violation.

2. The Revised Penal Code (RPC)

The Revised Penal Code provides general provisions on crimes against liberty and honor, which can be relevant in cases of harassment by online lending companies. Two pertinent provisions are:

Grave Threats and Coercion (Articles 282-287 of the RPC): If the online lender threatens the borrower with harm, whether physical, financial, or reputational, this could constitute grave threats. Coercion, meanwhile, refers to forcing someone to act against their will through violence or threats.
Slander and Defamation (Articles 353-362 of the RPC): If the lender publicly shames or humiliates the borrower by making false or damaging claims about them, the borrower may file a criminal complaint for defamation. Even truthful statements, if made with the intent to shame, may constitute "slander by deed" under Article 359 of the RPC.

The Role of the Bangko Sentral ng Pilipinas (BSP)

While the Bangko Sentral ng Pilipinas (BSP) primarily regulates formal financial institutions, its rules on financial consumer protection, particularly Circular No. 1048, can provide guidance on acceptable collection practices. Circular No. 1048 emphasizes that lenders should act fairly, transparently, and respectfully in their dealings with clients. Although it does not apply directly to informal online lenders, its standards can serve as a benchmark for ethical lending practices.

The Lending Company Regulation Act of 2007 (Republic Act No. 9474)

The Lending Company Regulation Act of 2007 governs registered lending companies and their practices. The law aims to regulate the establishment and operation of lending companies to protect borrowers from abusive and unethical practices.

Under Section 7 of RA 9474, lending companies are required to follow ethical debt collection practices. Harassment, intimidation, or humiliation of borrowers are prohibited. A violation of this provision could lead to the revocation of the lender's registration, administrative sanctions, or penalties.

Filing a Complaint with the Securities and Exchange Commission (SEC)

Many online lenders operate under the regulatory purview of the Securities and Exchange Commission (SEC). The SEC monitors lending companies and ensures that they comply with the relevant laws, including fair collection practices. In response to increasing complaints of harassment, the SEC has issued Memorandum Circular No. 18, Series of 2019, which specifically prohibits the following actions by lending companies:

Use of Obscene, Profane, or Abusive Language: Lenders cannot use offensive language in their communication with borrowers.
Threats of Violence or Harm: Lenders are prohibited from threatening to harm borrowers or their reputation.
Unfair Publication of Borrower's Information: Publicly disclosing a borrower's debt status or information without their consent is considered an unfair practice.
Use of False Representation or Deceptive Means: Lenders cannot deceive or misrepresent information to force borrowers to repay.

Borrowers can file complaints directly with the SEC if an online lender violates these rules. The SEC has the power to investigate the lender and impose penalties or suspend their operations.

How to File a Harassment Complaint

If you are a borrower facing harassment from an online lending company, you can take the following steps:

Document the Harassment: Keep records of all instances of harassment, including text messages, phone calls, emails, and social media posts. Take screenshots and note down dates and times when these events occurred.
File a Complaint with the NPC (for Data Privacy Violations): If the harassment involves unauthorized use or disclosure of your personal information, file a complaint with the National Privacy Commission. You can submit your complaint through the NPC's online portal, attaching all evidence of the data privacy violations.
File a Complaint with the SEC (for Unfair Collection Practices): If the online lender engages in abusive collection practices, you can file a formal complaint with the SEC. Provide a detailed account of the lender's actions, along with supporting documents such as screenshots or call recordings.
Seek Assistance from a Lawyer: In serious cases of harassment or defamation, you may want to seek legal representation. A lawyer can help you file a civil case for damages or assist you in filing criminal complaints for grave threats, slander, or coercion.

Possible Remedies

Borrowers subjected to harassment by online lenders can pursue the following remedies:

Civil Damages: Borrowers can file a civil case for damages if they suffer emotional distress, reputational harm, or other injuries due to the lender's abusive practices. The amount of damages will depend on the severity of the harassment and its impact on the borrower.
Criminal Charges: Depending on the circumstances, borrowers may also pursue criminal complaints for grave threats, slander, or coercion under the Revised Penal Code. These cases can lead to fines and imprisonment for the offenders.
Administrative Sanctions: Complaints filed with the NPC or SEC can lead to administrative penalties against the lender, including fines, suspension, or revocation of their license to operate.

Conclusion

Harassment by online lending companies is a growing concern in the Philippines, but borrowers are not without recourse. The Data Privacy Act, the Revised Penal Code, and regulations from the SEC and BSP provide a strong legal framework to protect borrowers from abusive practices. Borrowers can file complaints with the NPC for privacy violations, with the SEC for unfair collection practices, and may also pursue civil or criminal cases against lenders.

If you are facing harassment, it is important to know your rights and take immediate steps to document the abuse, seek legal advice, and file the necessary complaints. By doing so, you can protect your personal privacy and stop the unlawful actions of unscrupulous lenders.