Question:
If an online loan application's operating license got revoked in the Philippines, can they still charge their debtors?
Answer:
Legal Status of the Debt
The debt itself, as a legal obligation, generally remains valid even if the lender's operating license is revoked, unless the debt was incurred through fraudulent or illegal means. The revocation of a license primarily affects the lender's ability to continue doing business but doesn't automatically nullify existing legal obligations between the lender and borrower.
Consumer Rights and Regulations
Debtors have the right to be treated fairly and not be subjected to deceptive, unfair, or unconscionable acts. These principles are upheld by various regulations, including the Consumer Act of the Philippines (Republic Act No. 7394) and, depending on the specifics, potentially also by regulations governing financial institutions.
Existing Contracts
Any existing contracts between the lender and debtor typically remain in effect even after a license revocation, unless the contract itself or the manner in which it was executed is determined to be illegal. Debtors are generally expected to continue making payments as stipulated in their loan agreements.
Legal Recourse
Debtors should consult with a legal advisor if they are concerned about the implications of a lender's revoked license on their debt. There may be circumstances under which the revocation could affect the terms of the loan or the debtor's obligation to repay it.
Collecting the Debt
A lender with a revoked license may face restrictions on new lending activities but still has the right to collect on existing debts. However, they must abide by laws related to fair debt collection practices.
Complaints and Reporting
If a debtor believes that an online lending company is engaging in unfair practices, they can file a complaint with the Securities and Exchange Commission (SEC) or other relevant regulatory bodies. The revocation of a license is usually public information, and the regulatory body will have records of such actions.
Conclusion
In summary, the revocation of an online loan application's operating license doesn't automatically absolve debtors from their obligation to repay existing loans. However, it is advisable for debtors to consult legal experts to review their specific circumstances, particularly if they have concerns about the lender's practices.