Dear Attorney,

I am experiencing harassment from an online lending company even though I did not take out any loan from them. They keep contacting me and sending messages that I find harassing. What legal action can I take against this company? Please advise me on my options to stop this harassment.

Sincerely,
A Concerned Citizen

Insights

In the Philippines, the issue of harassment by online lending companies falls under several legal frameworks designed to protect the rights of individuals. One of the most relevant legal concepts in this scenario is harassment by debt collection and the corresponding protection afforded by laws such as the Data Privacy Act of 2012 (Republic Act No. 10173), the Lending Company Regulation Act of 2007 (Republic Act No. 9474), and related laws and regulations that address the abusive practices of lending companies.

1. Data Privacy Act of 2012

The Data Privacy Act of 2012 (DPA) serves as the primary protection against unlawful collection, processing, and use of personal information, which is common in cases of harassment by lending apps. When an individual’s data is used without proper consent or is used to harass the individual, this can be considered a violation of the DPA.

In cases of online lending apps, this often manifests in the following ways:

Unauthorized access to personal contacts and information stored on a borrower’s mobile phone.
Public shaming tactics, such as contacting family, friends, or employers without consent to pressure individuals into paying a debt, which may not even exist.
Unlawful processing of personal data for purposes that have not been agreed upon.

The National Privacy Commission (NPC) has been actively investigating and penalizing online lending companies that violate the DPA by using personal data to harass or shame alleged debtors. In such cases, individuals can file a complaint with the NPC to trigger an investigation. Violators of the DPA can face penalties, including fines and imprisonment, depending on the severity of the offense.

2. Lending Company Regulation Act of 2007 (Republic Act No. 9474)

This law governs the operations of legitimate lending companies in the Philippines, ensuring that they adhere to ethical standards in lending practices. Section 5 of this law requires lending companies to be properly registered and prohibits them from engaging in abusive debt collection practices.

Some lending companies or online lending apps, especially those that are unregistered or operating without proper oversight, are known to engage in unethical collection practices, such as:

Harassing calls or messages.
Publicizing debts or threatening to expose personal information to compel repayment.

The Securities and Exchange Commission (SEC) oversees the regulation of lending companies and has issued circulars prohibiting the use of harassment or abusive collection practices. If a lending company is found to be engaging in such practices, the SEC can impose sanctions, including the suspension or revocation of the company’s license to operate.

3. Cybercrime Prevention Act of 2012 (Republic Act No. 10175)

In cases where online platforms are used to harass individuals, particularly if the harassment involves threats, malicious communications, or illegal access to a person’s online information, the Cybercrime Prevention Act may be invoked. Under this law, cyber harassment and illegal access to a person’s data can lead to criminal prosecution.

Victims of online harassment by lending companies may file complaints under this act, particularly if they receive threatening or malicious electronic messages, or if their private data is accessed and used without consent.

4. Remedies Available to Victims of Harassment by Online Lending Companies

Victims of harassment by lending apps can take the following steps to seek redress:

File a Complaint with the National Privacy Commission (NPC):
If the harassment involves misuse of personal data, such as accessing contacts or sharing sensitive information without consent, individuals can file a complaint with the NPC for violations of the Data Privacy Act. The NPC has the power to investigate, mediate, and impose penalties on violators.
File a Complaint with the Securities and Exchange Commission (SEC):
If the company is a legitimate lending company, but it engages in unlawful collection practices, a complaint can be filed with the SEC. The SEC can sanction lending companies that violate the Lending Company Regulation Act and other pertinent regulations.
Seek Legal Action through Local Courts:
Victims may pursue civil cases against the lending company for damages, especially if the harassment has caused emotional distress, reputational damage, or other forms of harm. They may also file for an injunction to stop the company from continuing their harassing practices.
Criminal Complaints under the Cybercrime Prevention Act:
If the harassment involves cyberbullying, threats, or unauthorized access to personal information, victims may file a criminal complaint under the Cybercrime Prevention Act.
Temporary Restraining Order (TRO):
Victims can seek a TRO from the courts to immediately stop the lending company from engaging in further harassment while the case is being heard.

5. Government Actions and SEC Circulars

Recognizing the growing issue of harassment by lending apps, the SEC has issued specific circulars designed to combat this abuse. These include:

SEC Memorandum Circular No. 18, Series of 2019, which provides guidelines on the conduct of financing companies and lending companies, specifically prohibiting abusive and unethical collection practices. It also requires lending companies to maintain the confidentiality of a borrower’s data and prohibits public shaming.

The SEC continues to monitor the activities of lending companies and, in recent years, has suspended or revoked the licenses of companies that have been found guilty of these practices.

In conclusion, victims of online lending harassment in the Philippines have multiple legal remedies available to them. By filing complaints with the National Privacy Commission, the Securities and Exchange Commission, or through local courts, individuals can take action to stop the abusive practices and seek redress for any harm caused. It is important for victims to be aware of their rights and to take appropriate steps to protect themselves from further harassment.