Dear Attorney,

I hope this letter finds you well. I am reaching out to seek your legal guidance regarding an issue I have encountered with an online lending app. Due to the high interest rates they impose, I was unable to make timely payments. As a result, one of my contacts, whom I allegedly identified as a "co-maker" for the loan, has expressed frustration and anger toward me.

I am certain, however, that I did not sign any documents or explicitly name this individual as a co-maker when I applied for the loan. My concern now is whether this individual could face legal consequences due to their supposed designation as a co-maker, despite the lack of consent or signed agreement. Additionally, I am troubled by the harassment I am experiencing from the lending app and their practices.

Your advice on how to address these concerns would be greatly appreciated. Thank you in advance for your assistance.

Sincerely,
A Concerned Borrower

Legal Analysis of Issues Regarding Online Lending Apps and Alleged Co-Makers

Online lending apps have grown significantly in popularity in the Philippines, providing quick and accessible financial solutions. However, they often operate with practices that may exploit borrowers and violate applicable laws. This article explores the legal implications of the scenario presented, addressing both the borrower's and the alleged co-maker's concerns under Philippine law.

I. Overview of Online Lending Apps and Applicable Laws

Online lending platforms in the Philippines are governed by various laws and regulations, including:

The Consumer Act of the Philippines (RA 7394) - Protects borrowers from abusive practices.
The Lending Company Regulation Act of 2007 (RA 9474) - Regulates lending companies, requiring them to register with the Securities and Exchange Commission (SEC) and adhere to fair practices.
The Cybercrime Prevention Act of 2012 (RA 10175) - Addresses potential violations in digital transactions, including harassment or unauthorized use of personal data.
Data Privacy Act of 2012 (RA 10173) - Governs the handling of personal information, particularly against abusive debt collection practices.

II. Legal Issues Pertaining to Alleged Co-Makers

A co-maker in a loan agreement serves as a guarantor who agrees to repay the loan if the primary borrower defaults. To determine liability, the following points must be assessed:

Requirement for Consent and Agreement
- Under Article 1318 of the Civil Code of the Philippines, contracts are valid only when there is mutual consent among parties.
- In the absence of a written or verbal agreement wherein an individual expressly consents to be a co-maker, no legal obligations arise for that person.
Electronic Transactions
- If the lending app claims the alleged co-maker agreed electronically, such agreement must comply with the Electronic Commerce Act of 2000 (RA 8792), requiring proof of consent through valid electronic signatures or authenticated actions.
Potential Legal Risks for the Alleged Co-Maker
- Without explicit consent or evidence of agreement, the alleged co-maker cannot be held legally liable for the borrower’s debt.
- If the lending company falsely designates someone as a co-maker without their consent, the aggrieved party can file a complaint for fraud or misrepresentation.

III. High Interest Rates and Debt Collection Practices

Online lending apps often impose exorbitant interest rates, which may be considered usurious under Philippine law. While the Usury Law (Act No. 2655) no longer caps interest rates due to the issuance of Central Bank Circular No. 905, the Supreme Court has ruled that excessively high rates may be reduced for being unconscionable.

Assessment of Interest Rates
- Borrowers may contest exorbitant interest rates by filing a complaint with the SEC or seeking judicial intervention to reduce the rate.
Unfair Debt Collection Practices
- RA 9474 and SEC Memorandum Circular No. 18 prohibit lending companies from engaging in abusive collection tactics, such as harassment or public shaming.
- Complaints regarding harassment can be filed with the SEC, the National Privacy Commission (NPC), or local authorities.

IV. Harassment and Misuse of Personal Data

The Data Privacy Act prohibits unauthorized use or disclosure of personal data. Lending apps that contact a borrower’s contacts without proper authorization may face penalties.

Borrower’s Rights
- Borrowers can request the NPC to investigate lending companies for privacy violations.
- Lending apps found guilty of unauthorized data sharing may be fined and required to compensate victims.
Legal Remedies for Harassment
- Borrowers may seek protection orders or file criminal complaints for grave coercion, unjust vexation, or other applicable offenses under the Revised Penal Code.

V. Recommended Legal Actions

For the Borrower:

Secure Evidence - Collect screenshots, recordings, and messages from the lending app to substantiate claims of harassment or illegal practices.
File Complaints - Submit complaints to the NPC, SEC, or local authorities for violations of lending regulations and data privacy laws.
Engage Legal Counsel - Seek assistance from a lawyer to pursue legal remedies or negotiate with the lending app.

For the Alleged Co-Maker:

Demand Proof of Consent - Request the lending app to provide evidence of any agreement or consent.
File a Complaint for Misrepresentation - If no consent was given, the alleged co-maker may initiate legal action against the lending app.

VI. Conclusion

Borrowers and their alleged co-makers must be vigilant in dealing with online lending apps to safeguard their rights. Philippine laws provide avenues for redress against abusive practices, emphasizing the importance of consent, fairness, and the protection of personal data. If faced with similar challenges, affected individuals are advised to seek legal assistance to navigate the complexities of these disputes effectively.