Harassment by Lending Apps and Debt Collectors

What Lending and Financing Companies May Not Do

SEC Memorandum Circular No. 18, Series of 2019 (SEC MC 18-2019) lists unfair collection practices that lending and financing companies, and the outside collectors they hire, may not use:

1. using or threatening violence or other crimes against you, your good name or your property;
2. threatening to do something the law does not allow them to do;
3. using dirty words, insults or cursing;
4. disclosing or publishing the names and personal information of borrowers who have not paid, except as the circular allows (for example, to credit bureaus);
5. spreading false information about your loan, including not saying that you dispute the debt;
6. using lies or tricks, such as pretending to be a lawyer, a court, the police or a government office;
7. contacting you at unreasonable hours, which the circular sets as before 6:00 a.m. or after 10:00 p.m., unless the account is more than 15 days overdue or you agreed to those hours; and
8. contacting people in your contact list other than the guarantors or co-makers (people who signed the loan with you) you named, even if you "allowed" access to your contacts.

The SEC can fine the company, stop its lending for a time, or cancel its license to lend (Certificate of Authority). Other laws may also apply, such as the Financial Products and Services Consumer Protection Act, Republic Act No. 11765 (RA 11765).

Your Phone Data: The NPC's Rules for Lenders

Under the Data Privacy Act, Republic Act No. 10173 (RA 10173), and the NPC's circular on loan-related transactions (NPC Circular No. 20-01, as amended by NPC Circular No. 2022-02):

• A lending app may not ask for permissions it does not need.
• Using your contact list to collect from anyone other than the guarantor you chose, or to harass you or your contacts, is not allowed.
• Your photos may be taken for identity checks and fraud prevention, but may never be used to harass or embarrass you.
• A character reference you named (someone who can vouch for you) is not your guarantor and should not be asked to pay.

If an app messaged your contacts, posted your photo, or called you a scammer in group chats, that can be a data privacy violation as well as an SEC violation. See data privacy complaints.

What to Do When It Starts

1. Keep evidence. Screenshot every message and post, with the number or account, date and time. Ask friends and family who were contacted to screenshot what they received. Save call logs.
2. Find out who the lender is. Get the company's registered name, not just the app's name. The SEC publishes lists of lending and financing companies registered with it and their registered online lending platforms, and lists of apps it has ordered to stop.
3. Write to the lender. Say that the collector is violating SEC MC 18-2019 and the NPC's rules, demand that it stop contacting third parties, and, if you dispute the amount, say so. See the letter to a lending company. Keep proof that you sent it.
4. Ask for your statement of account (the record of what you owe). Check the amount, the interest and the charges against the Loan Agreement. See loans and Promissory Notes.
5. Complain to the government offices in charge (next section). You can complain to more than one.

Where to Complain

For an SEC complaint, prepare: your name and contact details, the company's name and the app's name, the loan details, a short account of what happened, and your screenshots. Attach your letter to the lender if you sent one.

What a Collector Is Allowed to Do

A lender may remind you of the debt, send you Demand Letters (formal letters asking you to pay), report to credit bureaus as the law allows, and sue you in court to collect. Most small debts go through small claims, where the court can order you to pay but does not send anyone to jail.

The Constitution says no person shall be imprisoned for debt. A collector who says you will be arrested for not paying a loan is making a false threat. The exception is a different situation: issuing a check that bounces can be a crime. See bouncing checks.

Harassment does not erase the debt. If you can, offer a realistic payment plan in writing and keep a record of every payment.