DOJ: Online lending companies that shame, curse borrowers may face charges

Mike Navallo, ABS-CBN News

Posted at Apr 26 2021 06:56 PM | Updated as of Apr 26 2021 09:05 PM

MANILA — The Department of Justice warned online lending companies who use unlawful and unfair methods to collect debts that they may face criminal charges.

In a public advisory dated April 23, DOJ Cybercrime Office OIC lawyer Charito Zamora listed down the laws and regulations lending companies might face if they resort to any of the following means to collect debts:

-accessing the borrowers’ phone book/contacts list for purposes of sending them messages in the event of untimely and/or non-payment 

-posting the borrowers’ personal and sensitive personal information online for purposes of shaming them 

-threatening borrowers with death and physical injuries if they fail to settle their account balances 

-using profane language through text message directly sent to the borrowers and to the their references for purposes of shaming them

These collection methods, according to the advisory, constitute “unfair debt collection practices” and “cyber harassments,” punishable under various laws.

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

The unauthorized access of a debtor’s mobile phonebook, directory or contact may constitute illegal access under the Cybercrime Prevention Act and could carry jail time of up to 12 years and fines of at least P200,000.

Malicious disclosure or publication of names and other personal or sensitive information as well as contacting persons in the borrower’s contacts list are both punishable under the Data Privacy Act. 

Disclosure is penalized with up to 5 years imprisonment and up to P1 million fine while the penalty for unlawful processing of data ranges from 1-year to 7-year jail time and fines of up to P4 million.

Use of or threats of violence and the use of obscenities, insults or profane language are punishable both under the Revised Penal Code and the Cybercrime Prevention Act which increases the penalty.

Meanwhile, under SEC memorandum circular no. 18, series of 2019, financing and lending companies who resort to unfair debt practices could face penalties ranging from P25,000 for the first offense to P50,000 for the second offense for lending companies and from P50,000 for the first offense to P100,000 for the second offense for financing companies.

Both companies could face fines of up to P1 million and suspension of activities for 60 days for the third offense, or worse, revocation of certificate of authority to operate.

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

The advisory was issued “in response to the increasing number of reports received and endorsed to it involving unfair debt collection practices and cyber harassments by online lending companies (OLCs).”

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