Letter to an Attorney:

Dear Attorney,

I am writing to seek legal assistance regarding a matter involving an online credit company from which I have a loan. My loan is due tomorrow, and I understand the need to meet this obligation. However, since this morning, the credit company has been bombarding me with multiple texts. They are sending repeated messages that feel harassing in nature, even though the due date has not yet passed. What is more alarming is that they have also been texting and harassing my contacts, which has caused me a great deal of stress and embarrassment.

I am concerned about the legality of these actions and would like to know what legal remedies are available to me. Specifically, I would appreciate advice on whether their behavior constitutes harassment under Philippine law and how I can protect both myself and my contacts from further harassment.

Thank you in advance for your guidance.

Sincerely,
Concerned Borrower

Legal Overview: Protection Against Harassment by Online Credit Companies under Philippine Law

In recent years, the rise of digital platforms for lending has provided consumers with faster and more convenient access to loans. While this development has undoubtedly brought about benefits for the public, it has also given rise to various legal and ethical concerns, especially regarding how online lending companies attempt to collect payments. One of the most pressing issues is the potential harassment borrowers experience, which may extend not only to the borrowers themselves but also to their contacts, often without prior consent.

This article explores the legal framework governing the rights of borrowers and the limits placed on online credit companies in the Philippines. It also addresses the options available to borrowers facing harassment and outlines the steps they can take to protect themselves and their contacts from abusive collection practices.

1. Debt Collection Harassment under Philippine Law

Debt collection harassment is not a new issue, but the manner in which it manifests has changed in the digital age. Online lending platforms often have access to the borrower’s contact information and the personal details of individuals listed as references. Unfortunately, some lenders exploit this access in ways that lead to unethical and sometimes illegal methods of collecting payments.

Under Philippine law, debt collection practices are subject to specific regulations that aim to protect borrowers from undue pressure and abuse. These regulations primarily stem from:

The Consumer Act of the Philippines (Republic Act No. 7394)
The Revised Penal Code
The Data Privacy Act of 2012 (Republic Act No. 10173)

Let’s break down how each of these laws applies to the issue at hand.

1.1. The Consumer Act of the Philippines

The Consumer Act of the Philippines outlines the responsibilities of businesses, including financial institutions, to engage in fair and honest dealings with consumers. While it does not contain specific provisions directly related to debt collection harassment, the principles enshrined in the act — such as fair treatment and the prohibition of deceptive or unfair practices — apply to lending companies as well. This law sets a baseline of conduct that lenders must follow when interacting with borrowers.

Any form of harassment, coercion, or undue influence in the collection of debts can be considered a violation of these consumer protection standards. Borrowers have the right to be treated with respect, and lenders are obligated to follow fair and lawful procedures when seeking to recover outstanding payments.

1.2. The Revised Penal Code

The Revised Penal Code includes provisions that penalize various forms of harassment and intimidation. While debt collection is a legitimate activity, certain behaviors that exceed the bounds of decency may be criminally actionable. For instance, Article 287 of the Revised Penal Code defines “unjust vexation” as any act that causes annoyance, irritation, or disturbance to another person. If a lender’s actions — such as incessant messaging, threats, or contacting one’s contacts without permission — cross this threshold, they may be held criminally liable for unjust vexation.

Additionally, the Anti-Cybercrime Act (Republic Act No. 10175) may apply to online harassment, as digital platforms are increasingly being used for these purposes. If the harassment occurs through electronic means, such as text messages or social media platforms, there may be grounds for pursuing a case under cybercrime laws.

1.3. The Data Privacy Act of 2012

One of the most relevant laws concerning harassment by online credit companies is the Data Privacy Act of 2012 (DPA). This law is particularly important in situations where lenders access, store, or misuse personal information without proper authorization. The DPA protects the privacy of individuals, including borrowers, by ensuring that personal data is processed lawfully and with consent.

In the context of debt collection, the DPA requires that lenders process personal data only for the purpose for which it was collected — i.e., for managing the loan and payment collection. The law prohibits lenders from accessing or using the personal data of individuals listed as contacts or references for any purpose other than those explicitly agreed upon by the borrower.

Lenders who harass borrowers by contacting their personal contacts without permission may be in violation of the DPA. Specifically, such actions may constitute an unauthorized processing of personal data, which is a punishable offense under the law. Borrowers and their contacts have the right to file complaints with the National Privacy Commission (NPC), which oversees the enforcement of the Data Privacy Act.

Case Study: Unauthorized Access to Contact Information

In a recent case, several online lending companies faced scrutiny after borrowers reported that their contacts were receiving harassing messages. The NPC investigated these companies and found that the unauthorized use of contact information violated the DPA. The NPC issued orders to cease such practices and imposed fines on the companies involved. This case underscores the importance of borrower consent and the limits placed on lenders when it comes to accessing third-party contact details.

2. Harassment and the Role of the National Privacy Commission (NPC)

The National Privacy Commission is tasked with enforcing the Data Privacy Act, and it plays a critical role in addressing complaints of data misuse and harassment. When borrowers feel that their privacy rights have been violated, they can file a complaint with the NPC. The NPC can investigate the actions of online credit companies, impose penalties, and order the cessation of illegal practices.

In cases where the lender has contacted the borrower’s contacts without permission, this is likely to be seen as a breach of privacy. Borrowers can lodge formal complaints with the NPC, which may then take appropriate action, including:

Ordering the cessation of unlawful data processing
Imposing fines on the lending company
Recommending criminal prosecution in severe cases

The NPC encourages borrowers and their contacts to document instances of harassment, such as saving text messages or call logs, which can serve as evidence during investigations.

3. The Role of the Securities and Exchange Commission (SEC)

Another government agency that oversees the conduct of online credit companies is the Securities and Exchange Commission (SEC). The SEC is responsible for regulating financing and lending companies in the Philippines, ensuring that they comply with the provisions of Republic Act No. 9474 (the Lending Company Regulation Act of 2007).

Under SEC Memorandum Circular No. 18, series of 2019, the SEC has laid out specific guidelines for the conduct of financing and lending companies in collecting payments from borrowers. This circular explicitly prohibits:

The use of abusive, unethical, and unfair practices in debt collection
The publication of borrower information to shame them into paying
The unauthorized use of borrower contact information, including contacting individuals other than the borrower

Any violation of these guidelines can result in the suspension or revocation of the lending company’s license, as well as the imposition of penalties. Borrowers facing harassment can file a complaint with the SEC, which may investigate the lending company and take appropriate action.

4. Steps Borrowers Can Take in Response to Harassment

If a borrower is experiencing harassment from an online credit company, they can take several steps to protect their rights:

Document the Harassment: Keep a record of all harassing messages, phone calls, or other communications from the lender. This documentation can serve as evidence when filing a complaint with the NPC or SEC.
File a Complaint with the NPC: If the harassment involves the unauthorized use of personal data, the borrower can file a complaint with the NPC. The NPC may then investigate and take action against the lender.
File a Complaint with the SEC: For violations of debt collection guidelines, such as abusive practices or contacting third parties without consent, borrowers can file a complaint with the SEC.
Consider Legal Action: In some cases, borrowers may choose to file a civil suit for damages resulting from the harassment. Depending on the severity of the lender’s actions, criminal charges may also be pursued under the Revised Penal Code.
Seek Assistance from Legal Aid Organizations: Borrowers who cannot afford legal representation may seek help from legal aid organizations that specialize in consumer protection cases.

5. Conclusion

The legal framework in the Philippines provides borrowers with several avenues of protection against harassment by online credit companies. Whether through consumer protection laws, the Data Privacy Act, or the oversight of agencies like the NPC and SEC, borrowers have the right to defend themselves against abusive and unethical debt collection practices.

While online lending offers convenience, it is important for lenders to act responsibly and within the bounds of the law. Borrowers who experience harassment should not hesitate to take action, whether by filing complaints with the appropriate government agencies or seeking legal advice.