Complaint Against Harassing Online Lending Companies

Written By Harold Respicio

Below is a comprehensive discussion on complaints against harassing online lending companies in the Philippines. This overview covers the nature of online lending harassment, the relevant laws and regulations, legal remedies, and practical steps for filing a complaint. It is provided for general informational purposes and should not be taken as formal legal advice. For specific concerns, consulting a licensed attorney is recommended.

1. Understanding Online Lending Harassment

1.1 Nature of Online Lending Companies

  • Online lending platforms (also called “fintech lending apps”) provide quick personal loans with minimal requirements, often through mobile applications or websites.
  • They rely on digital communication (texts, emails, chat apps, social media) for marketing, loan processing, and collection.

1.2 Harassment Tactics

Harassment by unscrupulous online lenders typically includes:

  1. Excessive and repeated calls or messages: Frequent calls or texts at all hours, sometimes to the borrower’s family, friends, or work contacts.
  2. Public shaming: Posting, messaging, or tagging the borrower on social media, threatening to expose their debts publicly.
  3. Use of threats or foul language: Intimidating or defamatory statements, threats of legal action, or other psychological pressure.
  4. Unauthorized access or disclosure of personal data: Sharing borrower’s sensitive personal information or contact list with third parties to collect payment.

2. Relevant Laws and Regulations

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

  • Governs the establishment and operation of lending companies.
  • Requires all lending companies, including online ones, to register with the Securities and Exchange Commission (SEC).
  • Provides that lending firms must adhere to ethical and legal debt collection practices.

2.2 SEC Memorandum Circulars on Unfair Debt Collection Practices

  • The SEC has issued Memorandum Circulars (e.g., SEC Memorandum Circular No. 18, Series of 2019) prohibiting unfair and abusive debt collection practices.
  • The circulars outline specific prohibited acts, such as:
    • Use of threats, insults, or profane language.
    • Threatening violence or damage to reputation/property.
    • Contacting people in the borrower’s contact list who are not guarantors.
    • Public shaming through social media or sending messages to third parties about the borrower’s debts.

2.3 Data Privacy Act of 2012 (Republic Act No. 10173)

  • Protects personal information from unauthorized or unnecessary use and disclosure.
  • Harassing calls or texts, especially those that involve contacting people who are not parties to the loan, may violate provisions of the Data Privacy Act.
  • Borrowers can file a complaint with the National Privacy Commission (NPC) if they believe their personal data has been misused, improperly collected, or disclosed without their consent.

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

  • Penalizes certain cyber offenses, such as online libel, identity theft, and illegal access to computer systems or data.
  • Lenders who post defamatory statements online, or access borrowers’ contact lists without authorization, may be liable under this law.

2.5 Revised Penal Code (RPC)

  • Threats, coercion, and grave slander can constitute criminal offenses under the RPC.
  • Although typically one would first seek administrative remedies (like with the SEC or NPC), extreme harassment could lead to criminal complaints under the RPC.

2.6 Financial Products and Services Consumer Protection Act (Republic Act No. 11765)

  • Provides additional rules on fair treatment of financial consumers, including stricter oversight and enforcement against abusive debt collection practices.
  • Empowers regulators (like the Bangko Sentral ng Pilipinas, SEC, Insurance Commission, and Cooperative Development Authority) to enforce consumer protection standards in their respective areas.

3. Legal Remedies and How to File a Complaint

3.1 Securities and Exchange Commission (SEC)

  • Who can file: Borrowers who have experienced unfair or abusive debt collection from SEC-regulated lending companies.
  • Scope: Violations of the Lending Company Regulation Act and SEC’s Memorandum Circulars.
  • Procedure:
    1. Gather Evidence: Save screenshots of messages, call logs, social media posts, and any other communication that shows harassment.
    2. Prepare Complaint: Draft a detailed explanation of the harassment, referencing relevant laws or SEC Circulars if possible.
    3. Submit: File the complaint at the SEC Enforcement and Investor Protection Department (EIPD). You may visit the SEC website or call their hotlines for guidance on submission procedures.
    4. SEC Investigation and Sanctions: If found liable, the lending company can face fines, suspension, or revocation of its license to operate.

3.2 National Privacy Commission (NPC)

  • Who can file: Individuals claiming a violation of the Data Privacy Act, i.e., personal information was shared or used inappropriately (e.g., contacting phonebook contacts).
  • Scope: Unauthorized or excessive use of personal data by the lending company.
  • Procedure:
    1. Collect Evidence: Document all instances of unauthorized data sharing. This could be testimonies from friends or colleagues who received calls/messages, chat screenshots, or phone logs.
    2. File a Complaint: Complaints can be lodged via email or physical submission to the NPC. Detailed instructions are on the NPC’s official website.
    3. NPC Proceedings: The NPC may investigate and penalize the company (fines, cease-and-desist orders, etc.).

3.3 Philippine National Police (PNP) and National Bureau of Investigation (NBI)

  • Who can file: Borrowers facing severe threats, extortion, or other criminal behavior (e.g., death threats, blackmail).
  • Scope: Potential violations of the Revised Penal Code or Cybercrime Prevention Act.
  • Procedure:
    1. Documentation: Preserve all evidence of threats or libelous content.
    2. Report: File a police report at your local PNP station or approach the NBI Cybercrime Division if the abuse occurred online.
    3. Investigation: The authorities will assess whether criminal charges are warranted.

3.4 Filing Civil Actions

  • Defamation, breach of contract, or damages: Borrowers may consider a civil suit if reputational or emotional harm was caused by the harassing lender.
  • Legal Counsel: Engage a lawyer to explore filing a civil complaint and obtaining damages or injunctive relief (e.g., to stop the harassment).

4. Practical Tips and Preventive Measures

4.1 Before Borrowing

  1. Check Legitimacy: Verify if the online lender is registered with the SEC. An unregistered entity may be more likely to engage in harassing tactics without fear of official repercussions.
  2. Read the Terms: Review data privacy clauses and collection protocols in the loan agreement or app’s “Terms and Conditions.”
  3. Check Reviews: Look for user experiences or complaints about the lender online.

4.2 During Harassment

  1. Document Everything: Keep screenshots, call logs, text messages, or any evidence that demonstrates harassing behavior or data misuse.
  2. Cease-and-Desist: You may send a written notice to the lender demanding they cease harassing or contacting third parties (friends/family). This can be done via email or registered mail.
  3. Block/Restrict: Block phone numbers or social media accounts if possible. Inform friends or contacts that you have not authorized the lender to contact them.

4.3 Reporting and Seeking Help

  1. Legal Aid and Law Enforcement: Speak with a lawyer, a local community legal aid organization, or directly with the police if threats escalate.
  2. Regulatory Agencies: The SEC or NPC can issue warnings, fines, or license revocations, which often deter further abusive practices.
  3. Support Groups: Online consumer forums and social media groups can provide shared experiences and moral support.

5. Potential Penalties for Violators

  1. Administrative Sanctions (SEC):
    • Fines ranging from thousands to hundreds of thousands of pesos.
    • Suspension or revocation of the Certificate of Authority to operate a lending company.
  2. Data Privacy Violations (NPC):
    • Fines that can reach up to millions of pesos (depending on the type and scale of the violation).
    • Imprisonment for officers of the company in severe cases (e.g., for willful or unauthorized disclosure of personal data).
  3. Criminal Liabilities:
    • Under the RPC or Cybercrime Prevention Act, convicted persons may face imprisonment, fines, or both.

6. Frequently Asked Questions

  1. Is non-payment of debt automatically a criminal offense?

    • In the Philippines, mere non-payment of debt is generally considered a civil matter, not a criminal offense, unless accompanied by fraud or other criminal acts.

  2. Can the lender access my contacts if I granted app permissions?

    • Granting app permissions does not give the company blanket authority to use or disclose personal data for harassment. They remain bound by the Data Privacy Act’s principles of legitimate purpose, proportionality, and transparency.

  3. What if I cannot repay my loan?

    • Contact the lender to negotiate a modified payment schedule or restructuring if feasible. However, that does not justify harassment—borrowers still have legal protections against abusive collection practices.

  4. How long do investigations by SEC or NPC take?

    • The duration varies. Investigations can take a few weeks to several months, depending on the complexity of the case, volume of complaints, and cooperation from the parties involved.

  5. Can I pursue multiple remedies at once?

    • Yes. You may file a complaint with the SEC and the NPC simultaneously, if the harassment involves both unethical lending/collection and data privacy violations. You may also report to law enforcement for any criminal acts.

Conclusion

Complaints against harassing online lending companies in the Philippines can be addressed through regulatory bodies like the Securities and Exchange Commission and the National Privacy Commission, as well as through law enforcement agencies and the courts. Key legal frameworks include the Lending Company Regulation Act, Data Privacy Act, SEC Memorandum Circulars on Unfair Debt Collection, and the Cybercrime Prevention Act.

If you experience harassment or believe your rights have been violated by an online lender, start by gathering evidence, then file a complaint with the relevant authorities. For severe or ongoing issues, consulting with an attorney is crucial. By understanding your rights and the protections in place, you can effectively address and seek redress for any abusive collection practices.

Disclaimer: This content is not legal advice and may involve AI assistance. Information may be inaccurate.

Harold Respicio
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