Dear Attorney,

I am a concerned acquaintance seeking your legal advice regarding a distressing situation. Someone I know apparently borrowed money through an online lending platform. I did not agree to be this person’s co-maker or guarantor in any form, yet I find myself receiving aggressive text messages and calls from representatives or collectors affiliated with this online lender. They keep insisting that I should be responsible for the borrower’s financial obligations, even though I never signed or agreed to be bound by any loan contract. The threats and harassing behaviors are causing me great worry and anxiety.

I respectfully request your guidance on how to navigate this matter in accordance with Philippine law. Is there a legal provision that prohibits such harassment? Am I compelled by law to pay on someone else’s behalf if I never signed a formal guaranty or co-maker agreement? Moreover, what steps can I take to protect my privacy and avoid further harassment from these collectors?

Thank you for your time and expertise. I look forward to your valuable insights on how I can address and resolve this situation.

Sincerely,

A Distressed Friend

LEGAL ARTICLE ON PHILIPPINE LAW

This legal article aims to provide an extensive discussion of the pertinent laws, regulations, and potential legal remedies related to harassment by online lending companies in the Philippines, especially when an individual who did not act as co-maker is nonetheless being pursued for debt collection. The focus is on explaining your rights, responsibilities, and legal remedies.

1. Introduction to the Philippine Legal Framework on Debt Collection

In the Philippines, debt collection is governed by various laws and regulations that aim to protect both creditors and debtors. Lending companies have the right to pursue legitimate claims but are not allowed to resort to abusive, unfair, or deceptive practices. A lender’s collection method must strictly comply with the standards set by the relevant government agencies, including the Bangko Sentral ng Pilipinas (BSP) for banks, the Securities and Exchange Commission (SEC) for non-bank entities with quasi-banking functions, and the Department of Trade and Industry (DTI) for consumer protection.

The primary reference laws regarding obligations and contracts include the Civil Code of the Philippines, particularly the sections on the nature and effect of obligations (Articles 1156 to 1304), as well as special laws like the Consumer Act of the Philippines (Republic Act No. 7394), which stipulates certain consumer protection provisions. Additionally, there are specific laws that address particular facets of debt collection and harassment.

2. Definition of a Loan Agreement

A loan agreement is a contract by which one party (the lender) delivers a certain amount of money to another (the borrower), with the borrower promising to repay this sum with or without interest. Under Philippine law, a loan agreement must meet the requisites for a valid contract: consent, object, and cause. Consent is crucial: a party cannot be held liable if they have not voluntarily agreed to bear financial responsibility. Hence, if you did not sign any document or provide any form of authorization to act as a co-maker or guarantor, there should be no contractual basis to bind you to the obligation.

3. Co-Maker vs. Guarantor vs. Mere Reference

Individuals often confuse the concepts of co-maker, guarantor, and someone who is simply a reference. Here’s the difference:

Co-Maker
A co-maker typically signs the loan contract, indicating that the co-maker shares the liability with the principal borrower. Should the principal borrower fail to pay, the co-maker can be held equally liable, depending on the terms of the contract.
Guarantor
A guarantor is usually a third person who promises to answer for the debt if the principal borrower fails to pay. The liability of a guarantor typically arises only if the creditor exhausts the assets of the principal debtor first, unless the guarantee agreement states otherwise.
Mere Reference
Some lenders require borrowers to list family members or acquaintances for contact or verification. However, if these references do not sign or verbally agree to any binding obligations, they should not be held liable for the borrower’s debt.

In the scenario at hand, you indicated that you did not act as co-maker or guarantor. You did not sign any documentation nor give explicit consent to be bound by the debt. Hence, the mere act of providing your contact information (without your consent) should not automatically render you liable.

4. Harassment by Online Lending Companies

Online lending has become common in the Philippines. Many of these lending platforms operate lawfully, but there have been widespread reports of certain online lenders engaging in harassment, threats, and even “shaming” or privacy violations. This harmful practice can be pursued under various laws:

Revised Penal Code (RPC)
Certain threatening or coercive behaviors, such as grave threats (Article 282) or grave coercion (Article 286), may subject the offender to criminal liability. If the collector threatens bodily harm or property damage, these acts could be prosecuted under the RPC.
Republic Act No. 10173 (Data Privacy Act of 2012)
This law protects personal information. Collectors who misuse or illegally share your personal data without your consent could be held liable. It also obligates personal information controllers and processors (like online lending apps) to secure users’ data and adhere to principles of transparency, legitimate purpose, and proportionality.
Republic Act No. 8484 (Access Devices Regulation Act)
Some online lending apps might store or use your personal information obtained through the app or your phone contacts. If they use such data in unauthorized ways, it could violate this law.
SEC Memorandum Circulars
The Securities and Exchange Commission has issued various rules and regulations for financing and lending companies, including the prohibition of unfair collection practices. Violators could face fines, suspension, or revocation of their licenses.
Civil Code (on Torts, Damages, and Obligations)
Under the Civil Code, any person who causes another injury through fault or negligence could be held liable for damages. Harassment, public shaming, or reputational harm might give rise to a claim for moral damages.

5. Liability for Non-Signatory Individuals

If an online lender or its collectors are demanding payment from a non-signatory or an individual who merely served as a reference for the borrower, there is generally no legal basis for them to force that person to pay. The basic principle of relativity of contracts (Article 1311 of the Civil Code) states that contracts are binding only upon the parties who execute them. This principle bars the creditor from holding you liable if you did not manifest consent.

Thus, if a collector threatens you with legal actions or claims that you are equally responsible, you have the right to demand proof of any document or arrangement that might indicate your liability. Absent such a document, you are not legally obligated to pay.

6. Debt Collection Guidelines

While creditors do have the right to pursue debtors, they are required to do so within legal and ethical parameters. If you receive harassing messages:

Document the Harassment
Take screenshots of text messages, record calls (if permissible under Philippine law and with notice to the collector), and store any evidence that shows the harassment. This is vital in case you need to file complaints with authorities.
Cease-and-Desist Communication
You can formally request the lender to stop contacting you, especially if you are not a party to the loan agreement. Such a written request, if sent through registered mail or email with acknowledgment, can serve as evidence.
Seek Redress from Regulatory Agencies
If you believe that the lender’s collection practices are abusive or violate your privacy rights, you can file a complaint with the SEC or the National Privacy Commission (NPC). The NPC is particularly concerned with data privacy and is empowered to order the cessation of unauthorized processing of personal data and to impose sanctions.
File a Criminal or Civil Case
Depending on the nature and severity of the threats, you may have grounds to file criminal charges under the Revised Penal Code or civil charges for damages under the Civil Code.

7. Data Privacy Considerations

With the rise of technology-based lending, it is not uncommon for lenders to request access to your phone contacts or social media accounts. This practice has given rise to controversies under the Data Privacy Act. Under the law, consent is paramount. A company that processes your personal data without your consent and for a purpose not stated in their privacy policies or beyond what is reasonably expected for the loan transaction might be violating your rights. Additionally, the unauthorized transfer or public disclosure of one’s personal information can subject the lender to penalties, including fines and imprisonment.

8. How the Law Protects Non-Borrowers from Harassment

Although existing laws focus heavily on the borrower-creditor relationship, non-borrowers are not entirely without protection. The following aspects are particularly relevant:

No Privity of Contract
Since there is no privity of contract, you cannot be bound by a contract that someone else entered into. Collectors cannot demand payment from you based on that loan contract alone.
Right to Privacy
Under the Constitution and relevant laws, individuals have the right to be free from intrusion into their private lives. Aggressive lenders who incessantly contact or publicly shame non-borrowers could be infringing on their right to privacy, especially if these communications are unwarranted and harassing.
Remedies Under Civil Law
Should the harassment amount to defamation, mental anguish, or unwarranted intrusion, the non-borrower might pursue civil remedies for moral and exemplary damages. Articles 19 to 21 of the Civil Code cover the concept of abuse of rights and may allow for a cause of action when someone willfully causes another to suffer harm in a manner that is contrary to morals, good customs, or public policy.
Criminal Complaints
Persistent threats of harm or intimidation can be reported to law enforcement. If the collector’s acts fall under the definitions of grave threats or grave coercion, the victim can pursue a criminal complaint.

9. Potential Defenses of the Non-Borrower

Should the harassment escalate to legal threats, keep in mind these possible defenses:

Lack of Consent
You never consented to be part of the loan agreement. No contract or document was signed; hence, you are a stranger to the transaction.
Absence of Privity of Contract
Only parties to the loan agreement can be held liable. Article 1311 of the Civil Code supports this defense.
Violation of Data Privacy
If the lender used your personal details without your informed consent, the lender could be in violation of the Data Privacy Act, strengthening your position.
Harassment or Coercion
Collectors could face criminal or administrative sanctions if they employ methods that violate the law.

10. Steps to Safeguard Yourself

If you find yourself being harassed by collectors related to an obligation that is not yours, the following steps can help you protect your rights:

Send a Formal Notice
Draft a clear and concise letter stating you are not party to the loan. Request them to remove your contact details from their system and cease any further communication. Keep a copy of this letter and proof of service.
Report to Regulatory Bodies
Lodge a complaint with the SEC if the lender is a licensed financing or lending company. If you believe your data privacy rights have been violated, file a complaint with the National Privacy Commission.
Secure Legal Representation
Although not always necessary, engaging a lawyer can help you better understand your rights and how to enforce them. Legal counsel can also draft cease-and-desist letters and represent you if litigation is pursued.
Build Your Evidence
Harassment cases hinge on clear documentation. Keep every message, screenshot, or voicemail, and note the dates, times, and content of each communication.
Stay Informed
Regularly monitor advisories from government agencies concerning unscrupulous lenders. Updates on new regulations or memoranda may strengthen your case.

11. Relevant Government Agencies and Their Roles

To address disputes or concerns involving lending harassment, you may approach the following Philippine government entities:

Securities and Exchange Commission (SEC)
The SEC supervises financing and lending companies. They issue memorandum circulars to ensure lawful collection activities. Complaints about harassment by an SEC-registered online lending platform can be filed with the SEC Enforcement and Investor Protection Department.
National Privacy Commission (NPC)
The NPC is responsible for enforcing the Data Privacy Act. If the lender improperly accessed or disclosed your personal data, you may file a complaint here. The NPC can investigate, issue compliance orders, and impose penalties for data privacy infringements.
Bangko Sentral ng Pilipinas (BSP)
If the lender is a bank or quasi-bank under BSP supervision, you can file a complaint for unfair collection practices with the BSP.
Department of Trade and Industry (DTI)
DTI ensures consumer welfare. Although DTI primarily handles consumer goods and basic services, they may refer you to the proper agency if your complaint falls outside their scope.
Philippine National Police (PNP) or National Bureau of Investigation (NBI)
If the harassment involves criminal conduct—such as grave threats, extortion, or harassment of a severe nature—you can file a police report and possibly seek assistance from the NBI if specialized investigation is necessary.

12. Possible Legal Actions Against Harassment

You have the following options if a lending company or its collectors resort to harassment:

Criminal Complaint
File a complaint for grave threats (Article 282), light threats (Article 283), or grave coercion (Article 286) under the Revised Penal Code, if applicable.
Civil Suit for Damages
You can initiate a civil action for damages under Articles 19 to 21 and other relevant provisions of the Civil Code. If proven, you may recover moral and exemplary damages.
Administrative Complaint
You may lodge complaints with the SEC and the NPC. Upon finding a violation, these agencies can impose fines or revoke the company’s license to operate.
Injunction or Restraining Order
In extreme cases, you can seek a court injunction to stop the harassing behavior, provided you present strong evidence of the ongoing harm.

13. Frequently Asked Questions

Can I ignore the collector’s demands?
While you may be inclined to ignore the demands, it is better to respond firmly but politely, clarifying that you are not a party to the loan. Letting the harassing behavior go unanswered sometimes emboldens unscrupulous collectors.
What if they threaten to file a case against me?
You cannot be forced to pay a debt if there is no legal or contractual basis. If the threats are baseless, you may have a counterclaim against them for harassment or malicious prosecution should they file a frivolous lawsuit.
Is it enough to just block their calls and messages?
Blocking might temporarily relieve the stress, but it can be more prudent to keep the evidence of harassment. If the harassment persists via new numbers or channels, you have a stronger case once you decide to take action.
Do I need a lawyer immediately?
Depending on the severity of the harassment, you may not need immediate representation. However, consulting with a lawyer ensures you are fully aware of your rights and the best course of action.

14. Conclusion

In sum, Philippine law provides comprehensive protections against harassment by online lending companies. Even if you are simply a reference or have had your number used without your knowledge, you are not automatically liable for another person’s debt. Moreover, the use of threats, intimidation, or abusive collection tactics is prohibited. You have recourse under the Revised Penal Code, Civil Code, Data Privacy Act, and other relevant statutes. Through meticulous documentation of any misconduct, filing complaints with regulatory bodies, and asserting your rights, you can safeguard yourself from unjust collection practices.

Should these unwanted communications escalate, seek the help of competent legal counsel to explore filing criminal or civil cases. Under the right circumstances, you may recover damages for emotional distress, reputational harm, or privacy violations. Ultimately, while creditors have a right to collect, they must do so lawfully, ensuring that innocent non-parties do not become collateral victims to unscrupulous debt collection methods.

By understanding the specific rules and regulations that govern consumer credit and online lending in the Philippines, you empower yourself to respond effectively and protect your rights. If you were never a signatory or consenting party to the loan, then you cannot be compelled to shoulder someone else’s obligation. Keep your records, know your legal remedies, and remember that the law is on your side to shield you from harassing practices.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. For specific concerns, please consult a licensed attorney.