Dear Attorney,

I am being harassed and threatened through text messages by a lending app after I borrowed money. The messages are intimidating and are causing me stress. What can I do legally about this situation?

— Concerned Borrower

Insights

Legal Protections Against Harassment by Lending Apps in the Philippines

The issue of harassment by lending apps in the Philippines is a serious matter governed by several legal principles, including laws on privacy, debt collection practices, and consumer protection. Borrowers facing abusive behavior from online lending apps should be aware of their rights and the legal recourse available to them. Below are some key laws and legal concepts that govern such situations:

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

The Data Privacy Act is one of the central laws that regulate how lending apps and companies should handle personal information. Under this law, individuals have the right to be informed about how their personal data is being used and can demand that their data be handled properly.

Key Provisions:

Consent: Lending apps must ensure that the borrower consents to the collection, processing, and use of personal data. If they use the borrower's data without consent for purposes such as public shaming, borrowers can lodge a complaint with the National Privacy Commission (NPC).
Unauthorized Disclosure: If the lending company shares the borrower's personal information with others, such as sending defamatory messages to their contacts or posting personal details online, this can be considered a violation of the Data Privacy Act. Violations may result in criminal penalties and administrative fines.
Right to Rectification and Erasure: Borrowers can demand corrections to any inaccurate data held by the lending app or request that their personal data be deleted, especially if it is being used inappropriately.

2. The Revised Penal Code of the Philippines (Act No. 3815)

The Revised Penal Code also addresses forms of harassment and intimidation through certain provisions related to threats and coercion.

Key Provisions:

Grave Threats (Article 282): If the lending app is threatening the borrower with harm to their person, reputation, or property, this can qualify as grave threats under the law. Grave threats are a criminal offense punishable by imprisonment.
Unjust Vexation (Article 287): Even without actual threats, repeated harassment through text messages or other means can be considered unjust vexation. This occurs when someone causes another person distress without any lawful purpose.

3. Republic Act No. 3765 (Truth in Lending Act)

This act ensures that consumers, including borrowers, are provided with full disclosure of loan terms and conditions. Lending companies must comply with the provisions of the Truth in Lending Act by transparently disclosing interest rates, penalties, and other fees. Failure to do so can render the loan terms unenforceable.

Key Provisions:

Full Disclosure: Lending companies must disclose the total cost of the loan, including all applicable charges. If the company fails to provide clear terms or imposes hidden charges, borrowers can challenge these practices before the courts or appropriate regulatory agencies.

4. SEC Memorandum Circular No. 18, Series of 2019

To address the growing concern of harassment from lending companies, the Securities and Exchange Commission (SEC) issued specific rules regulating online lending companies. This memorandum circular focuses on protecting borrowers from abusive collection practices.

Key Provisions:

Prohibited Acts: The circular prohibits online lending companies from engaging in abusive and unfair collection practices. These include using threats, profanity, and humiliating borrowers in front of their family, colleagues, or social circles.
Sanctions and Penalties: Violations of these rules can result in the suspension or revocation of the lending company’s SEC registration, effectively shutting down its operations. Borrowers can report such companies to the SEC, which has been proactive in issuing cease and desist orders against erring lenders.

5. Republic Act No. 7394 (Consumer Act of the Philippines)

The Consumer Act is a general law that protects consumers, including borrowers, from unfair and abusive practices. This law provides additional legal grounds for borrowers to file complaints against lending companies.

Key Provisions:

Unfair Trade Practices: If the lending company engages in deceptive practices, such as misrepresenting loan terms or employing undue influence, this can be considered an unfair trade practice. Borrowers can report such practices to the Department of Trade and Industry (DTI) for appropriate sanctions.
Consumer Redress: The law provides mechanisms for consumers to seek redress, including the filing of complaints before consumer protection bodies.

6. Legal Remedies for Borrowers

Borrowers who experience harassment and threats from lending apps have several legal remedies:

1. File a Complaint with the National Privacy Commission (NPC):

If the lending app is violating the borrower's data privacy rights, the borrower can file a complaint with the NPC. The NPC investigates data privacy violations and can impose fines or other penalties on the offending company.

2. File a Complaint with the Securities and Exchange Commission (SEC):

The SEC is responsible for regulating online lending companies. Borrowers who experience abusive collection practices can report the lender to the SEC, which can suspend or revoke the company’s registration.

3. File a Criminal Case:

If the lending app has committed acts constituting grave threats, coercion, or unjust vexation, borrowers may file a criminal case with the local police or prosecutor’s office. This can lead to criminal charges and imprisonment for those involved in the harassment.

4. Civil Action for Damages:

Borrowers who suffer emotional distress or reputational harm due to harassment can file a civil suit for damages under the Civil Code of the Philippines. The borrower can claim moral and exemplary damages against the lending app or its agents.

Conclusion

Harassment by online lending apps is a violation of several laws in the Philippines, including the Data Privacy Act, the Revised Penal Code, and regulations imposed by the SEC. Borrowers are entitled to seek legal remedies to protect themselves from threats, intimidation, and improper use of their personal data. By knowing their rights and the available legal avenues, borrowers can take action against lending companies that engage in unlawful practices. Legal counsel can assist borrowers in pursuing these remedies and ensuring their rights are fully protected.