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Understanding Your Rights as a Borrower Against Abusive Lending Apps

Updated: 2 days ago

Lending apps have gained popularity in the Philippines as a convenient option for quick cash. However, the rise of these apps has also brought concerns about debtor harassment and violations of borrower rights. At Lawyers Online PH, we are committed to protecting your rights as a borrower and ensuring a fair lending environment. Here's what you need to know about your rights and the legalities surrounding lending apps in the Philippines.

Legal Protections against Debtor Harassment

Republic Act (R.A.) 10175, also known as the Cybercrime Prevention Act of 2012, provides legal protection against cyber harassment and cyberbullying, including offenses such as Illegal Access and Cyber Libel. Lending apps must comply with the provisions of this law when handling borrower information and transactions to ensure the safety and privacy of borrowers.

Data Privacy and Protection

The Data Privacy Act of 2012 (RA 10173) safeguards the processing of personal information and sensitive personal information. It prohibits the unauthorized processing of such data, as well as malicious disclosure. Lending apps must adhere to this law to protect the privacy and personal information of borrowers.

Legal Remedies for Harassment

The Revised Penal Code provisions on grave or light threats, grave or light coercions, or unjust vexation, in relation to Section 6 of RA 10175, offer legal remedies for borrowers who experience harassment or threats from lenders or debt collectors. These provisions ensure that borrowers are protected from any form of mistreatment or coercion.

Guidelines on Fees and Charges

The Bangko Sentral ng Pilipinas (BSP) Circular 454 and Securities and Exchange Commission (SEC) Memorandum Circular 18, series of 2019, provide guidelines to prevent hidden fees and unreasonable charges imposed by lending apps.

BSP Circular 454 requires lending apps to disclose all fees and charges related to the loan agreement, including interest rates, processing fees, and other charges. Lenders must provide a sample computation of the loan and disclose the annual percentage rate (APR) before entering into a loan agreement. This ensures transparency and helps borrowers make informed decisions.

SEC Memorandum Circular 18, series of 2019, promotes responsible lending practices. Lending apps are prohibited from engaging in harassing behaviors such as using threatening language, making excessive phone calls, or disclosing a borrower's debt to third parties. This circular ensures that borrowers are treated fairly and respectfully throughout the lending process.

Protecting Your Rights as a Borrower

If you experience debtor harassment or believe that a lending app has violated any of these laws or circulars, you have the right to file a complaint with the BSP or the SEC. At Lawyers Online PH, our team of expert lawyers can assist you in filing a complaint and provide legal representation to ensure that your rights as a borrower are protected.

In conclusion, while lending apps offer convenience, it's important to be aware of your rights as a borrower and the potential risks involved. By understanding the legalities and guidelines for fair lending practices, you can protect yourself from abusive lending apps and make informed decisions. At Lawyers Online PH, we are dedicated to safeguarding your rights and providing expert legal advice and representation for any issues related to lending apps.

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