Dear Attorney,

I hope this message finds you well. I am writing to seek your legal assistance regarding an issue I am experiencing with a loan application. I availed of a loan from an online lending platform, but due to an unfortunate family emergency involving an accident, I was unable to make the repayment on time. While I informed the lending company’s agents that I would settle the amount once funds are credited to my account, they have continued to harass me through persistent calls and text messages.

What concerns me the most is their threats to contact my Facebook friends and other personal contacts to pressure me into repayment. These agents have already accessed my personal information, and I fear that they will act on their threats, which I find deeply invasive and unfair. Moreover, I am disturbed by the steep interest rates and deductions imposed by the app. For instance, I borrowed ₱10,000 but only received ₱6,000, with a repayment period of seven days.

This situation has caused me immense stress and anxiety, and I want to know if there are legal remedies available to stop this harassment and resolve the matter. I believe their actions may be violating laws on fair debt collection and data privacy. I humbly request your guidance on how I can proceed with this case.

Sincerely,
A Concerned Borrower

Understanding the Legal Remedies for Unfair Lending Practices in the Philippines

1. Loan Agreements and Interest Rates

Under Philippine law, loan agreements are governed by the Civil Code of the Philippines. While lenders can impose interest, it must be expressly stipulated in writing and must not exceed the limitations set by law.

Excessive Interest Rates: In the case described, the loan's interest rate is exorbitant, as only ₱6,000 of the ₱10,000 loan was released, effectively reflecting a 40% deduction. This may be considered usurious under Republic Act No. 3765, also known as the Truth in Lending Act, which requires lenders to disclose the true cost of borrowing, including interest and other charges. Although the Usury Law has been suspended, courts may still void contracts with excessive interest rates as they are contrary to public policy.

2. Debt Collection Practices

The actions of the loan app agents, including persistent messaging and threatening to contact your friends, may violate the Fair Debt Collection Practices Act (Republic Act No. 8556) and Republic Act No. 10173 (Data Privacy Act of 2012):

Harassment and Abuse: Section 2 of RA 8556 prohibits debt collectors from engaging in any form of harassment or abusive practices in collecting debts. Continuous texting, calling, and threatening to disclose personal debts to third parties constitute harassment.
Unauthorized Disclosure of Information: The agents’ threat to contact your Facebook friends or other personal contacts may be a violation of RA 10173, which protects individuals’ personal information from unauthorized use and disclosure.

3. Data Privacy and Consent

Lending apps often require borrowers to grant access to their mobile contacts and other personal data as part of the application process. However, under the Data Privacy Act, consent must be freely given, informed, and specific.

Abuse of Consent: If the app's privacy policy was not clearly disclosed or if the consent to access your contacts was obtained through deceptive means, the lending company may be held liable for data privacy violations.
Complaint with the National Privacy Commission (NPC): Borrowers can file complaints with the NPC for unauthorized use of personal data. The NPC may investigate and impose penalties on the company for breaching the Data Privacy Act.

4. Remedies for the Borrower

As a borrower, you have several legal options to address the harassment and unfair lending practices:

File a Complaint with the Securities and Exchange Commission (SEC):
- Lending apps are regulated by the SEC, which has issued Memorandum Circular No. 18, series of 2019, prohibiting unfair debt collection practices by financing and lending companies.
- You may submit a complaint to the SEC detailing the harassment, the exorbitant interest rates, and the app’s non-compliance with the Truth in Lending Act.
Seek Assistance from the National Privacy Commission:
- Report the unauthorized access and threats to disclose your personal data to the NPC. Provide evidence such as screenshots of messages and call logs to support your claim.
File a Civil Case:
- If the company continues its abusive practices, you may file a civil case for damages under Article 19 and Article 21 of the Civil Code for abuse of rights and violations of good faith.
Report to the Bangko Sentral ng Pilipinas (BSP):
- The BSP has jurisdiction over financial institutions, including those offering digital loans. They have hotlines and email addresses to accept reports about unfair lending practices.

5. Psychological Distress and Damages

The stress and depression caused by the harassment may also be compensable under Article 2217 of the Civil Code, which recognizes moral damages for mental anguish caused by wrongful acts. Documentation such as medical certificates and a psychiatrist’s report can strengthen your case.

6. How to Protect Yourself Moving Forward

Document the Harassment: Keep all evidence of harassment, including text messages, call logs, and screenshots.
Do Not Share Sensitive Information: Avoid sharing further personal details with the loan company.
Seek Legal Assistance: Consult a lawyer to represent you and guide you through filing complaints and pursuing remedies.
Educate Yourself on Legitimate Loan Options: Always review the terms and conditions of lending platforms and ensure they are SEC-registered.

7. Conclusion

The issues you are facing highlight the need for stronger regulation and enforcement against abusive lending practices in the Philippines. While digital lending offers convenience, borrowers must be vigilant about their rights. The law provides various remedies to protect individuals from harassment, data privacy violations, and unfair loan terms. By pursuing legal action and reporting the company to the appropriate regulatory bodies, you can put an end to the harassment and seek justice for the distress caused.

If you require further assistance or representation, I am available to provide legal support to ensure your rights are protected.