Letter from a Concerned Individual

Dear Attorney,

I am writing to seek your guidance on a deeply troubling situation that I have found myself in. I have recently encountered what I believe to be unlawful behavior from certain online lending applications. These apps have allegedly been issuing death threats, imposing extremely high interest rates, and engaging in other forms of harassment against borrowers who may have missed or been late on their payments. In my case, I have been subjected to aggressive and threatening messages that go beyond reasonable attempts at debt collection.

I am worried not only for my own personal safety but also for my financial well-being and peace of mind. I would like to understand the legal remedies available to me under Philippine law. I am unsure about the best channels to report these matters—especially the death threats and the harassment—and how to hold these online lenders accountable for any illegal practices they might be employing.

Your advice would be greatly appreciated. I am concerned about preserving my rights and ensuring my safety. I hope you can guide me on the most effective legal steps to take, which government agencies I can approach, and what evidence I should gather to strengthen my claims. Please let me know the appropriate actions to pursue under current Philippine law.

Respectfully,
A Concerned Borrower

Comprehensive Legal Article on Reporting Death Threats, High Interest, and Harassment by Online Lending Apps in the Philippines

Introduction

In recent years, the proliferation of online lending applications in the Philippines has offered consumers quick access to short-term credit. While this financial innovation has eased credit constraints for many borrowers, it has also paved the way for certain predatory practices. Some online lenders have been reported to employ unethical and unlawful tactics, including death threats, harassment, excessive or usurious interest rates, and unlawful disclosure of personal information.

Such conduct goes well beyond the acceptable boundaries of debt collection and contravenes several Philippine laws, regulations, and guidelines designed to protect consumers. Anyone facing this situation has the right to seek legal redress, report these incidents to the appropriate authorities, and ensure that these violators are held accountable.

Governing Legal Framework

Constitutional Rights and Personal Safety:
At the most fundamental level, the 1987 Philippine Constitution safeguards every citizen’s right to life, liberty, and security. Threatening bodily harm or issuing death threats violates these fundamental constitutional protections. Moreover, the State bears a duty to protect citizens from threats to life and property, ensuring that victims have recourse under criminal law and various statutes.
Criminal Laws on Threats and Harassment:
Under the Revised Penal Code (RPC) of the Philippines, various provisions penalize threats, intimidation, and harassment. For instance:
- Grave Threats (Article 282, RPC): Any person who threatens another with the infliction of a crime that can cause substantial harm, such as bodily injury or death, may be held criminally liable for grave threats. Such acts are punishable by imprisonment and/or fines. If an online lender or its representatives threaten a borrower with death or serious harm, they may be guilty of grave threats.
- Light Threats (Article 283, RPC) and Other Forms of Unjust Vexation (Article 287, RPC): Even if the threat does not meet the threshold of “grave,” lesser forms of intimidation and harassment can still be punishable. Frequent harassing messages and unwarranted intimidation can be considered unjust vexation.
It is important to note that criminal liability attaches to individuals who issue these threats. If the online lending entity is a corporate body, its officers or agents directly involved in the harassment could be held liable. Local law enforcement agencies, such as the Philippine National Police (PNP) and the National Bureau of Investigation (NBI), can assist in investigating these incidents.
Usury and Excessive Interest Rates:
Historically, the Philippines had an Anti-Usury Law (Act No. 2655), which imposed ceilings on interest rates. Although the law was effectively liberalized over time, the Bangko Sentral ng Pilipinas (BSP) and other regulatory bodies can set guidelines and implement rules to combat unconscionable lending practices. In recent years, no absolute cap on interest rates exists in the traditional sense due to deregulation, but certain consumer protection mechanisms allow regulators to intervene when interest rates are clearly abusive or unconscionable.

The Securities and Exchange Commission (SEC) and the BSP have periodically issued guidelines, warnings, and enforcement actions against online lenders that charge exorbitant rates. If the interest rates are unconscionable, it may be possible to argue before regulators or a court that they constitute a violation of public policy, or that the contract is void for being contrary to law, morals, or public order.
Data Privacy and Confidentiality Breaches:
Many online lending apps engage in intrusive practices, such as accessing a borrower’s personal contacts or sending messages to friends and family about the debt. Under the Data Privacy Act of 2012 (R.A. No. 10173), personal information must be collected and processed fairly, lawfully, and for a legitimate purpose. If an online lender uses contact lists or other personal data improperly, or discloses them to third parties without consent, it may face administrative penalties from the National Privacy Commission (NPC).

Moreover, the NPC has issued public advisories cautioning online lending applications against practices that violate data privacy rights. Complaints can be filed with the NPC, which has the authority to investigate and penalize entities engaged in data privacy violations.
Consumer Protection Laws and Regulations:
The Consumer Act of the Philippines (R.A. No. 7394) aims to protect consumers from deceptive, unfair, and unconscionable sales and lending acts. Although its primary focus is on the sale of goods and services, it provides a general framework for protecting consumers from unscrupulous practices. In conjunction with newer financial consumer protection frameworks, these laws empower regulators like the SEC and the Department of Trade and Industry (DTI) to address complaints.

The BSP and SEC have regulatory frameworks aimed at overseeing financial institutions, including lending companies and financing institutions. Online lending platforms that operate without proper registration or fail to follow regulatory guidelines may be subject to penalties, suspension of licenses, or revocation of their certificates of authority. In 2019, the SEC issued Memorandum Circulars to regulate fintech companies and lending applications, reminding them of fair debt collection practices and forbidding harassment and threats.
Regulatory Bodies and Where to Report:
Victims of harassment and illegal collection practices can approach several entities for help:
- Philippine National Police (PNP) or National Bureau of Investigation (NBI): To report death threats, bring copies of threatening messages, screenshots, call recordings, or any evidence of harassment. Filing a police blotter is often the first step. Depending on the severity and nature of the threats, the NBI’s Cybercrime Division can also be helpful, especially if the threats are issued online or through electronic communications.
- Securities and Exchange Commission (SEC): If the online lending app is a registered lending or financing company, complaints related to illegal lending practices, usurious interest, and non-compliance with SEC regulations may be filed with the SEC. The SEC has enforcement powers, including the authority to revoke licenses of errant lenders.
- National Privacy Commission (NPC): For violations of data privacy, such as unauthorized dissemination of personal information to third parties, borrowers can file a complaint with the NPC. The NPC can investigate the complaint and may impose penalties or require the erring company to take corrective measures.
- Local Government Units (LGUs) and Barangay Officials: In some cases, involving community-level authorities can help, especially if the harassment is ongoing. Barangay officials may mediate or assist in filing the appropriate complaints with the police.
Civil Remedies:
Apart from criminal and regulatory actions, victims can also consider filing a civil case for damages. Under Philippine law, a party who suffers moral damages due to harassment, threats, and injury to their rights and well-being may seek compensation in court. The Civil Code of the Philippines provides grounds for claims under quasi-delicts, human relations provisions (Article 19, 20, 21), and contracts. For instance, if a lender’s illegal collection practices cause emotional distress, reputational harm, or other forms of injury, the borrower may be entitled to damages.

In addition, if the interest rates are found unconscionable or not agreed upon in a fair and transparent manner, a court may reduce the interest to a reasonable amount or even void the usurious stipulation. This could provide significant relief from inflated obligations.
Evidence Gathering:
Building a solid case against an abusive online lender requires proper documentation. Borrowers should:
- Preserve all threatening messages, screenshots, emails, call recordings (if legally obtained), and any evidence of harassment.
- Keep records of the loan agreement, including the original terms, conditions, and schedules. If the online lender deviated from the agreed terms or imposed new, higher interest rates without proper notice, that could strengthen the borrower’s case.
- Document instances of data privacy breaches, noting the time, date, and manner in which personal information was misused.
  This body of evidence will be crucial when presenting complaints before law enforcement, regulatory agencies, or courts.
Practical Steps for Victims:
Victims should consider taking the following steps:
- Secure Your Safety First: If death threats are credible, ensure personal safety. This may involve seeking immediate police assistance or even temporary relocation if necessary. The PNP can advise on personal safety measures.
- Report to Authorities: File a complaint with the PNP or NBI. For data privacy concerns, file a complaint with the NPC. For regulatory violations by a lending company, file a complaint with the SEC.
- Consult a Lawyer: While not always mandatory, consulting a lawyer can help victims understand their options, draft complaint letters, and represent them in court proceedings if necessary.
- Check the Lender’s Legitimacy: Verify if the lender is registered with the SEC. Unregistered or unlicensed lenders are more likely to engage in unscrupulous practices. The SEC’s website lists registered lending and financing companies.
- Inform the NPC About Privacy Violations: If the harassment extends to contacting friends and family or exposing personal data, a complaint before the NPC can be effective.
- Consider Filing Criminal Complaints: If the threats are severe and credible, filing a criminal complaint with the Prosecutor’s Office may be warranted. The prosecutor will evaluate the evidence and may file charges in court against the offender.
Role of the SEC and Other Regulators in Enforcement:
In response to the increasing number of complaints against abusive online lenders, the SEC, at times, has taken strong enforcement actions. These include issuing cease and desist orders, revoking licenses, and imposing fines. Lending companies found to be operating illegally or engaging in unjust collection practices may be shut down. The SEC also coordinates with the NPC, DTI, and other government agencies to tackle overlapping issues of data privacy, consumer protection, and debt collection harassment.
Public Awareness and Education:
Given the rise of online lending apps, public awareness campaigns by government agencies and consumer rights groups are critical. Consumers should be educated about their rights, the risks of unverified lending apps, the warning signs of abusive lenders, and the proper channels for filing complaints. The BSP and SEC have been encouraging responsible lending practices and urging borrowers to be cautious in choosing their lenders.
Legislative Developments and Future Outlook:
The Philippine Congress and financial regulators continue to monitor the situation as the digital lending landscape evolves. Proposed measures and amendments to existing laws may offer more robust consumer protections, set clearer interest rate caps for certain kinds of loans, and enhance the powers of regulators to combat harassment and threats. New regulations may also be introduced to tighten requirements for lending apps, ensuring their compliance with ethical, legal, and fair practices.
Comparative Analysis:
The Philippines is not alone in facing issues with predatory online lending. Other jurisdictions have tackled similar problems by passing stricter lending regulations, strengthening enforcement mechanisms, and enhancing privacy protections. Learning from these examples, the Philippine regulators may adopt best practices, such as stronger penalties, clear caps on interest rates for small loans, and streamlined complaint mechanisms that rapidly address consumer grievances.
Challenges in Enforcement:
Despite existing laws, effective enforcement can be challenging due to the anonymity of online transactions and the difficulty in locating unscrupulous lenders who may be operating outside the country or using shell companies. Coordination among government agencies, international cooperation (if foreign entities are involved), and technological solutions to track and identify violators play crucial roles in enforcement efforts.

Moreover, victims often hesitate to file complaints out of fear of retaliation or uncertainty about their rights. Encouraging victims to come forward, ensuring witness protection if necessary, and simplifying the complaint process can help overcome these barriers.
The Importance of Due Diligence by Borrowers:
While the law provides remedies, prevention is equally important. Borrowers should perform due diligence before transacting with any online lender. Checking the SEC’s list of registered lending and financing companies, reading online reviews, and examining the terms and conditions carefully can help prevent falling into debt traps. Borrowers should also be cautious when granting permissions to their mobile devices, such as granting access to their contacts or media files, as this can lead to potential data misuse.

Conclusion

Dealing with death threats, harassment, and usurious interest rates from online lending applications is a serious issue that must be addressed promptly and decisively. Philippine law provides robust protections against these abuses: the Revised Penal Code penalizes threats, the Data Privacy Act protects personal information, and the SEC and NPC regulate lending practices and data handling. Victims have several channels for seeking redress, from law enforcement authorities like the PNP and NBI, to regulatory bodies like the SEC and NPC.

The key steps for victims include gathering evidence, filing the necessary complaints, seeking professional legal advice, and coordinating with the relevant government agencies. With proper enforcement of existing laws, continued public awareness efforts, and the improvement of legal frameworks, borrowers can be better protected against predatory lending practices and criminal harassment. The ultimate goal is a financial marketplace where borrowers have access to credit without fear of threats, exploitation, or violation of their fundamental rights.