FROM BEEPERS TO BYTES
Many borrowers from people offering loans online have reported instances of harassment and public shaming. This worrying trend emerged during the pandemic and continues today. Online lending platforms have become popular because they provide fast financial services.
The most common complaint against some online lending groups involves the unauthorized use of personal data from the complainants' mobile contacts. As a prerequisite for loan approval, complainants said that some lenders require applicants to access their contact list. The complainants allege that their contact lists have been used by the lending company to contact their family members, friends and even work colleagues, when they fail to pay on the due date.
A borrower said that a lender has sent messages that a borrower is a “scammer” just because a loan was not paid. This has become effective in forcing borrowers to pay their debts.
We have also received reports on the “excessive interest rates” that are charged. A borrower reported that he received only ₱8,000 for an approved loan of ₱15,000. The borrower’s failure to pay within a week increased the loan amount to ₱23,000.
When the borrower failed to pay the ₱23,000, the collector posted online a warning that the borrower is a criminal. This false accusation was also posted on the Facebook pages of the borrower's daughter's school, resulting in significant stress and shame for the borrower and his family.
Last year, there were media reports that a lender was accused of sending funeral wreaths or flowers to borrowers who failed to pay their loans within a short period.
The woman borrowed ₱5,000 but only received ₱2,400 due to various deductions. When she failed to make the initial payment on time, the lender offered her a one-week extension with an additional fee of ₱2,000. She declined. Following her refusal, she said the lender threatened her, saying: "Okay, keep being stubborn. Just wait and see what I'll send you."
She said the collector warned her that a coffin would be the next item they will send if she failed to pay.
Other scammers have grabbed the chance to make money from the despair of borrowers.
Various fraudulent schemes targeting individuals struggling to repay their online loan agreements have emerged, exploiting their financial vulnerabilities. These scams are diverse but unified in their exploitative objectives— to get your money.
One scam involves groups that claim to have the ability to delete debt records from the databases of lenders through hacking or insider manipulation. Victims are charged substantial fees for these services, which ultimately prove to be ineffective and fraudulent.
Another category of scammers present themselves as "counselors and resource groups." These groups offer assistance in managing online lending related issues for a flat fee. While they provide emotional support and advice, their services often fail to yield practical solutions, worsening their clients' financial difficulties.
Two government agencies – the Securities and Exchange Commission (SEC) and the National Privacy Commission (NPC) – can help the victims of these platforms.
The SEC has encouraged victims of these platforms to step forward. By filing complaints with the SEC, particularly through the Enforcement and Investor Protection Department, consumers can initiate investigations and legal actions against malpractices. Individuals affected by such issues can contact the SEC directly via their official email at [email protected].
Similarly, the National Privacy Commission has taken a firm stand against violating privacy laws by online lending firms. In an era where data is as valuable as currency, the NPC's role in enforcing data privacy laws is crucial. The commission has recommended the prosecution of online lending firms that misuse personal data, demonstrating their commitment to upholding privacy rights. If these platforms leaked your personal information to harass you, email the NPC at [email protected]
Be patient, from the time complaints are received, the Complaints and Investigation Division, through its investigating officers, has 30 days to proceed or dismiss the complaint. The process should take about 10 to 12 months to final resolution.
Together, the actions of the SEC and the NPC reflect a concerted effort by the Philippine government to address the emerging challenges posed by digital financial services. Their proactive stance not only provides a recourse for affected individuals but also serves as a deterrent against the misuse of online platforms, thereby fostering a safer and more trustworthy digital lending environment.
In addition, the CyberSecurity Philippines CERT, a non-profit Computer Security Incident Response Team (CSIRT) and the first registered Computer Emergency Response Team (CERT) in the Philippines, has issued warnings and guidance regarding deceptive and abusive debt collectors. They regularly inform the public about the appropriate government agencies where victims can file complaints.