DOJ: Online loan companies that shame borrowers may face fees

MANILA – The Justice Department has warned online loan companies that use illegal and unfair methods to collect debts that they could be subject to criminal prosecution.

In a public notice dated April 23, DOJ Cybercrime Office OIC attorney Charito Zamora listed the laws and regulations that loan companies could face if they resort to any of the means. to collect their debts:

-access the phone book / contact list of borrowers for the purpose of sending them messages in the event of delay and / or non-payment

-publishing the personal and sensitive information of borrowers online in order to humiliate them

Threaten borrowers with death and personal injury if they fail to settle their account balances

-use vulgar language by SMS directly sent to borrowers and their references in order to humiliate them

These collection methods, according to the opinion, constitute “unfair debt collection practices” and “cyber-harassment”, punishable by various laws.

Among the laws that may be violated are the Cybercrime Prevention Act (RA 10175), the Data Protection Act (RA 10173), the revised Criminal Code and a circular memorandum from the Securities and Exchange Commission.

Unauthorized access to a debtor’s directory, directory or contact may constitute unlawful access under the Cybercrime Prevention Act and may result in a prison sentence of up to 12 years and fines of at least 200,000 P.

Malicious disclosure or publication of names and other personal or sensitive information as well as contact with individuals on the borrower’s contact list are both punishable under data protection law.

Disclosure carries a prison sentence of up to 5 years and a fine of up to 1 million pesos, while the penalty for illegal data processing ranges from one year to 7 years. imprisonment and fines of up to 4 million pesos.

The use or threats of violence and the use of obscenity, insults or profane language are punished both by the revised Penal Code and by the Cybercrime Prevention Act which increases the penalty.

Meanwhile, under SEC Circular Memorandum no. 18, 2019 series, finance and loan companies that engage in unfair debt practices could face penalties ranging from P 25,000 for the first offense to P 50,000 for the second offense for loan companies and from 50,000 P for the first offense to 100 P .000 for the second offense for finance companies.

Both companies could face fines of up to 1 million pesos and a 60-day suspension of operations for the third offense, or worse, revocation of the certificate of authorization to operate.

In the same public notice, the DOJ Cybercrime Office said borrowers victimized by loan companies could turn to the National Bureau of Investigation-Cybercrime Division, the Philippine National Police-Anti-Cybercrime Group, the National Privacy Commission and the SEC.

The notice was issued “in response to the growing number of reports received and approved of unfair debt collection practices and cyber-harassment by online loan companies (OLCs)”.


Ministry of Justice, Cybercrime Bureau, Charito Zamora, loan companies, unfair debt collection

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David A. Albanese

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