Letter to a Lawyer:
Dear Attorney,
I hope this message finds you well. I am reaching out to seek your legal guidance regarding a troubling situation I’ve encountered. I have taken out a loan from a digital lending application, and since then, the representatives of this loan company have been harassing me in various ways. They have contacted me and my contacts through calls and messages, made threats, and even posted embarrassing content on social media, including my personal information. These actions have caused me extreme emotional distress and have tarnished my reputation among friends and colleagues.
I am unsure about my rights in this situation and how best to proceed to protect myself from further harassment. Could you kindly provide me with advice on how to handle this matter legally, what steps I should take, and whether I can take action against the company?
Sincerely,
A Concerned Borrower
Understanding Your Legal Rights and Remedies When Harassed by Loan Apps in the Philippines
As digital lending apps have grown in popularity in the Philippines, many borrowers have reported abusive and harassing practices by these companies. This harassment often comes in the form of incessant calls, threats, and even public shaming on social media. Such conduct, which goes beyond mere attempts to collect a debt, can cause emotional distress, invade privacy, and even result in reputational harm. In this legal article, we will explore the rights of borrowers under Philippine law, what constitutes harassment by loan apps, and the available legal remedies to protect individuals from such behavior.
1. Borrower’s Rights and the Legal Framework Governing Lending Practices
In the Philippines, borrowers are protected by various laws and regulations designed to prevent predatory lending and abusive collection practices. These protections are found in the following statutes and regulations:
Republic Act No. 3765 (Truth in Lending Act): This law requires lending companies to disclose all the necessary information about loans, including interest rates and other fees, ensuring borrowers are fully informed before entering into a loan agreement.
Republic Act No. 10173 (Data Privacy Act of 2012): This law governs the collection, storage, and use of personal information. Lenders who disclose private information without the borrower’s consent may be held liable under this act.
BSP Circular No. 1133 (Guidelines on the Regulation of Online Lending): The Bangko Sentral ng Pilipinas (BSP) has implemented regulations to govern online lending platforms. These rules require lending companies to follow fair and transparent practices, including proper disclosure of terms and conditions.
Consumer Protection in Financial Transactions: The Securities and Exchange Commission (SEC), the BSP, and other financial regulatory bodies are involved in ensuring that consumers are protected from abusive lending practices. The SEC has a mandate to regulate lending companies and prevent them from engaging in unfair or deceptive collection practices.
Despite these legal safeguards, many digital lending apps have been reported to employ tactics that violate the rights of borrowers. These tactics often include harassment, threats, and the illegal dissemination of personal information.
2. What Constitutes Harassment by Loan Apps?
Harassment by loan apps typically includes a range of aggressive or inappropriate behaviors aimed at pressuring the borrower to repay the loan. While lenders have the right to collect what is owed, they must do so within the boundaries of the law. Some of the common forms of harassment include:
Excessive or Frequent Contact: Some loan companies resort to bombarding borrowers with multiple calls or text messages, often at unreasonable hours. Philippine law recognizes the borrower’s right to privacy and peace, and creditors must adhere to reasonable practices when contacting debtors.
Threatening Language or Intimidation: Making threats to harm the borrower’s reputation, employment, or well-being is a clear violation of the borrower’s rights. This can include threats of lawsuits, which may be used as a scare tactic to force repayment.
Public Shaming or Blacklisting: One of the most egregious forms of harassment involves publicly disclosing a borrower’s financial obligations to their contacts or on social media platforms. This practice, sometimes referred to as “debt shaming,” violates privacy laws and can cause irreparable harm to the borrower’s personal and professional life.
Use of Social Media for Harassment: In recent cases, some lending apps have been reported to post photos or names of borrowers on social media, labeling them as “delinquent” or “untrustworthy.” Such practices constitute a serious violation of privacy and are subject to penalties under the Data Privacy Act.
Third-Party Involvement: Harassing the borrower’s family, friends, or colleagues to pressure the debtor into making payments is also considered unlawful. Loan apps often access contact lists without permission, violating the privacy rights of both the borrower and their contacts.
3. Legal Remedies Available to Borrowers
If you are experiencing harassment from a loan app, you have several legal remedies at your disposal under Philippine law. Below are some of the most important actions you can take to protect yourself from further harm:
a. Filing a Complaint with the Securities and Exchange Commission (SEC)
The SEC oversees lending companies, including online lending platforms. Borrowers who have been harassed can file a formal complaint with the SEC, which can lead to the investigation and possible suspension or revocation of the lending company’s license. The SEC has been proactive in shutting down rogue lending companies that have engaged in abusive practices.
In 2019, for instance, the SEC issued Cease and Desist Orders against several online lending companies found guilty of violating borrowers' rights. The SEC continues to monitor digital lending platforms closely to ensure compliance with the law.
b. Filing a Complaint with the National Privacy Commission (NPC)
If a loan app has illegally accessed or disclosed your personal information, you can file a complaint with the NPC. The Data Privacy Act of 2012 protects individuals from unauthorized processing of personal data, including the use of contact lists obtained through mobile phones.
In 2021, the NPC issued guidelines specifically addressing the unlawful use of contact lists by lending companies. Borrowers who have had their personal data shared or disclosed to third parties without consent can seek relief through the NPC, which has the authority to impose fines and other penalties on violators.
c. Filing a Civil Case for Damages
If the harassment has caused you emotional distress, loss of reputation, or other forms of harm, you may have the option to file a civil case for damages. Under Philippine law, Article 26 of the Civil Code protects individuals from the wrongful invasion of privacy. You can file for moral and exemplary damages if you can prove that the harassment has caused significant harm to your mental well-being or reputation.
The burden of proof will require documentation of the harassment, such as saved messages, call logs, or social media posts. Courts in the Philippines have awarded damages in cases where plaintiffs were able to show that they had suffered emotional and psychological harm as a result of debt collection harassment.
d. Filing a Criminal Complaint
Harassment by loan apps may also give rise to criminal liability, especially if it involves threats, coercion, or libelous statements. The Revised Penal Code of the Philippines punishes certain acts of harassment, including:
Grave threats under Article 282, which punishes those who threaten to commit a crime against the person or property of another;
Unjust vexation under Article 287, which punishes any act that causes annoyance or distress without justification;
Libel under Article 353, which punishes false and malicious imputations that may cause dishonor, discredit, or contempt.
If the harassment rises to the level of these criminal offenses, you can file a complaint with the Philippine National Police (PNP) or the National Bureau of Investigation (NBI). It is advisable to consult with an attorney to determine whether a criminal case is warranted.
4. Steps Borrowers Can Take to Protect Themselves
Aside from seeking legal remedies, borrowers should also take practical steps to protect themselves from harassment. Here are some actions you can consider:
Keep a Record of All Interactions: Save all text messages, emails, and social media posts that are harassing in nature. Take screenshots or make recordings of any inappropriate behavior. These will serve as evidence if you decide to file a legal case.
Block Harassing Contacts: If the harassment becomes unbearable, consider blocking the numbers or accounts that are being used to contact you. While this may not stop the harassment entirely, it can provide temporary relief.
Reach Out to the SEC and NPC: If the harassment persists, contact the SEC and NPC for assistance. Both agencies have processes in place to handle complaints against abusive lending companies.
Consult with a Lawyer: It is highly recommended that you seek legal counsel to assess your case and guide you on the appropriate legal actions to take. A lawyer can help you draft complaints, gather evidence, and represent you in any legal proceedings.
Conclusion
The rise of digital lending platforms has given borrowers convenient access to funds, but it has also led to an increase in abusive and unlawful practices by some lenders. Harassment, threats, and the illegal dissemination of personal information are not only unethical but also against Philippine law. Borrowers who experience such harassment have the right to seek protection and legal remedies.
Whether through filing complaints with regulatory bodies, pursuing civil damages, or taking criminal action, borrowers have several avenues to assert their rights and hold abusive lenders accountable. If you are facing harassment from a loan app, do not hesitate to take action and seek the assistance of legal professionals who can help you protect your rights and restore your peace of mind.