Dear Attorney,
I seek your legal advice regarding my troubling situation with multiple online lending apps. Initially, I was able to meet my payment obligations, but soon I found myself caught in a vicious cycle of borrowing to repay, until my debt spiraled out of control. The high-interest rates have significantly eroded the amount I actually receive, with nearly half of the loan being deducted in fees and interest.
Now, I am being harassed by these lenders. Despite my efforts to communicate with them and explain my situation, they have resorted to publicly shaming me, spreading defamatory statements within my community, and labeling me a scammer. This has severely affected my reputation, and I am unsure how I can repay them under such distressing circumstances.
I urgently need guidance on how to protect myself from further harassment and resolve these debts legally.
Sincerely,
A Concerned Borrower
Insights
Your situation is, unfortunately, not uncommon in the Philippines, where many people have been negatively impacted by predatory lending practices from unregulated online lending companies. Below are key legal steps and insights that can help you address the harassment and explore legal remedies:
Debt Collection Harassment: The Fair Debt Collection Practices law under Republic Act No. 10175 (Cybercrime Prevention Act), and other relevant regulations, explicitly prohibit harassment, public shaming, or threats from creditors or lending companies. Publicly accusing someone of being a "scammer" or spreading defamatory information without legal basis constitutes a violation of the Cyber Libel provisions. You may have grounds to file a complaint against these lending companies for violating your privacy and dignity.
Unlawful Collection Practices: The Lending Company Regulation Act of 2007 (RA 9474) requires lending firms to operate within the bounds of the law, particularly when it comes to debt collection practices. The Securities and Exchange Commission (SEC) is responsible for ensuring that online lending companies comply with fair practices. If these companies are not registered or are engaging in abusive collection tactics, you may file a formal complaint with the SEC.
Interest Rates and Charges: Many online lending apps impose excessive interest rates, often far beyond what is considered reasonable under Philippine law. The Usury Law and related regulations prevent lenders from charging exorbitant interest rates, although this has been loosely regulated since the Central Bank's Circular No. 905. The BSP (Bangko Sentral ng Pilipinas) has implemented caps on interest rates for payday loans and other lending instruments. If the interest rates and fees are unreasonably high, you may have a basis to contest the debt and demand proper recalculation of your loan.
Debt Restructuring: Another option available to you is negotiating with the lending companies for a debt restructuring agreement. Through this process, you can request for lower payments or extend the repayment period in a way that is manageable for you. This can help you avoid falling deeper into the debt trap.
Legal Recourse: If the harassment continues, you may pursue legal action through small claims court, which is designed for resolving financial disputes in a simpler and faster manner. This process does not require legal representation and is suitable for debt-related disputes, including those arising from online loans.
Reporting to Authorities: You can report any illegal activities or harassment by these companies to the National Privacy Commission (NPC) for violation of your rights under the Data Privacy Act of 2012. The unlawful use of your personal data, particularly when it is used to harass you or publicly shame you, is a serious violation of this law.
Your first step should be gathering all communications and evidence of the harassment, including screenshots or recordings, which can be crucial for pursuing a formal complaint. It would also be wise to formally write a demand letter to these lenders to cease their illegal actions.
Seek the assistance of a lawyer to ensure your rights are protected and to explore the possibility of filing complaints with the appropriate regulatory bodies, such as the SEC and NPC. Your legal protections under Philippine law are clear, and you do not need to face this harassment alone.
By understanding these legal rights and options, you can take control of your situation and seek the necessary remedies to prevent further harm.