Estafa: What It Is and What to Do

What Estafa Is

Estafa, also called swindling, is defined in Article 315 of the Revised Penal Code. Two things are always present: abuse of confidence or deceit (trickery) and damage to the victim that can be measured in money. The article groups the ways it is done into three:

1. Unfaithfulness or abuse of confidence. The most common is when you receive money, goods or property in trust, on commission, for administration or under a duty to deliver or return it, and you misappropriate (use as your own) or convert it, or deny receiving it. Examples: an agent who keeps the payments they collected, or a person who pawns a car lent to them. Writing something above someone's blank signature to their harm is also in this group.
2. False pretenses or fraudulent acts done before or at the same time as the fraud. Using a fake name, or pretending to have power, influence, qualifications, property, credit, agency or business, to get money or property. Paying with a check you know will bounce (paragraph 2(d)) is also here. See bouncing checks.
3. Other fraudulent means. Tricking someone into signing a document, cheating at gambling, or removing or destroying court records or office papers.

Two related articles cover lighter frauds:

• Article 316 (other forms of swindling) covers, among others, pretending to own real property (land or a building) and selling, renting or mortgaging it, and selling property as free of liens when you know it is encumbered (mortgaged or subject to a claim).
• Article 318 (other deceits) is a catch-all for deceit that causes damage but does not fit Articles 315 to 317, and it also punishes, for profit, interpreting dreams, telling fortunes or taking advantage of people's credulity (how easily they believe). The penalty is arresto mayor (light jail time) and a fine of not less than the damage caused and not more than twice that amount.

Penalties by Amount

Republic Act No. 10951 (RA 10951), approved 29 August 2017, updated the amounts in Article 315. For estafa done by abuse of confidence, false pretenses (other than a bad check) or other fraudulent means, the prison term depends on the amount of the fraud:

Estafa with a bounced check under paragraph 2(d) has its own, much heavier brackets, going up to reclusion perpetua (a very long prison term) for the largest amounts. The judge sets the exact term within the range, applying other rules such as the Indeterminate Sentence Law (which gives a minimum and a maximum term).

On top of the prison term, the court orders the accused to return the money or pay its value, with damages where proven. This is the civil liability (the private money claim) that goes with the crime.

Estafa or Just an Unpaid Debt?

Article III, Section 20 of the 1987 Constitution says: "No person shall be imprisoned for debt or non-payment of a poll tax." If you borrowed money and cannot pay it back, that is a debt, not estafa. In a loan, the money becomes the borrower's to spend, so spending it is not misappropriation. The lender's remedy is to collect, for example through a Demand Letter, the barangay or small claims. See can I go to jail for unpaid debt.

It can become estafa when there is something more:

• the money or goods were given in trust for a specific purpose, with a duty to return them or deliver them to someone, and they were used for something else;
• the deceit came first: a lie, such as a fake title, a fake business or a false identity, that made the victim hand over the money. A promise that is simply broken later is usually not enough;
• a check that bounced was the way the money or goods were obtained.

Collectors sometimes threaten "estafa" over an ordinary loan to scare people into paying. That threat is often empty. See debt collection harassment.

Estafa, BP 22 and Online Estafa

Estafa and BP 22. Batas Pambansa Blg. 22 (BP 22), the Bouncing Checks Law, punishes issuing a check that bounces, even without deceit. Estafa under paragraph 2(d) needs deceit and damage: the bad check must be how the money or goods were obtained. A check issued to pay an old debt may fall under BP 22 but usually not estafa. The same check can lead to both cases. See bouncing checks.

Online estafa. Section 6 of the Cybercrime Prevention Act of 2012, Republic Act No. 10175 (RA 10175), says that a crime in the Revised Penal Code committed through information and communications technology (the internet, phones, computers, apps) is penalized one degree higher (one step up the law's scale of prison terms). So estafa through a fake online shop, a Facebook post or a messaging app carries a heavier penalty than the same estafa done face to face. RA 10175 also separately punishes computer-related fraud.

If you were scammed online, first call your bank or e-wallet and save the evidence. See reporting online scams.

Syndicated or large-scale estafa. Presidential Decree No. 1689 (PD 1689) punishes estafa by a syndicate of five or more persons that defrauds the public, such as some investment and pyramid schemes, much more heavily.

If You Were Cheated

1. Gather your proof. Receipts, contracts, the trust receipt or acknowledgment, bank or e-wallet records, screenshots of chats and posts, the bounced check and the bank's return slip, and the names of witnesses.
2. Send a written demand. In estafa by misappropriation, a demand to return the money or property that is ignored helps show misappropriation. Use a Demand Letter and keep proof that it was received.
3. Check if the barangay comes first. If you and the other person are individuals living in the same city or municipality, and the penalty is not more than 1 year (generally estafa of ₱40,000 or less), the complaint usually goes to the barangay first. See barangay conciliation.
4. File a complaint with the prosecutor. Prepare a sworn Complaint-Affidavit with your witnesses' affidavits and copies of your evidence, and file it with the Office of the City or Provincial Prosecutor. The police (PNP) or NBI can also help investigate and file. See filing a criminal complaint.

The civil claim for the money is generally included in the criminal case unless you reserve it or file it separately. If what you mainly want is your money back and the amount is within the limit, small claims may be faster.

If You Are Accused of Estafa

• Do not ignore a subpoena (an official order to answer) from the prosecutor. It gives you a deadline to file a sworn Counter-Affidavit with your side and your evidence. If you do not answer, the prosecutor decides on the complainant's evidence alone.
• Get a lawyer. The Public Attorney's Office helps people who qualify, and IBP legal aid chapters also help.
• Keep your records: receipts, the loan or agreement papers, proof of payments, and messages showing what was really agreed. Whether it was a loan or money held in trust often decides the case.
• Paying back can help settle the civil side and may lead the complainant to sign an Affidavit of Desistance (a sworn statement that they no longer want to pursue the case), but it does not automatically end a criminal case. The prosecutor or court decides.
• If a warrant of arrest is issued, you generally have the right to bail. Know your rights if you are arrested.