Debt Collection Rules: Know Your Rights as a Borrower
Lenders in the Philippines may collect what you owe through reasonable and legal means, but they may not threaten you, insult you, shame you publicly, pretend to be officials or contact people in your contact list other than the guarantors or co-makers you named, even if you consented. If you are being harassed, keep evidence and report to the SEC, the National Privacy Commission or the police, depending on what happened.
Owing money is stressful, and pressure from collectors can make it worse. Knowing where the line is helps you respond calmly. This guide explains the main rules, what is and is not allowed, how to protect yourself and where to report problems. It is general information, not legal advice.
The Main Rules
SEC Memorandum Circular No. 18, Series of 2019 prohibits unfair debt collection practices by financing and lending companies and the third parties they hire. It took effect on 8 September 2019 after the SEC received complaints about abusive collection.
The Financial Products and Services Consumer Protection Act (Republic Act No. 11765) and its SEC implementing rules protect financial consumers and classify abusive debt recovery practices, including contacting people in a borrower's contact list other than guarantors or co-makers.
The Data Privacy Act of 2012 (Republic Act No. 10173) requires personal data to be processed lawfully and fairly. Using your contacts or personal details to shame you can breach it.
The Constitution states that no person shall be imprisoned for debt.
What Lenders May Do
- Send reminders that a payment is due.
- Call or message you at reasonable times about the debt.
- Send a formal written demand stating the amount and due date.
- Offer payment arrangements or restructuring.
- Pursue a civil claim for the amount owed through proper legal process.
What Lenders May Not Do
Under SEC Memorandum Circular No. 18 and related rules, prohibited practices include:
- using or threatening violence or other criminal means to harm your person, reputation or property,
- using obscene, insulting or profane language,
- falsely claiming to be a lawyer, police officer, court officer or government agent,
- disclosing or publishing your name or debt to shame you,
- contacting persons in your contact list other than those you named as guarantors or co-makers, even if you consented,
- harassing you through repeated calls or messages at unreasonable hours,
- sending threatening or shaming materials.
The SEC has penalized lenders for these acts, including fines, orders to stop and, in serious cases, revocation of the Certificate of Authority. Reports in 2026 describe sanctions on a lender after a borrower complained of shaming messages and threats to contact an employer.
Rights You Keep Even When You Owe
- You have the right to be treated with dignity.
- You have the right to ask for a breakdown of what you owe, including principal, interest, fees and penalties.
- You have the right to dispute an amount you believe is wrong.
- You have the right to your privacy and to ask how your data is used.
- You have the right to be free from threats and public shaming.
Penalty ceilings also exist for covered loans. SEC Memorandum Circular No. 3, Series of 2022 caps late-payment penalties at 5% per month of the outstanding scheduled amount and sets other limits on interest and total cost. Our article on the Pesoloan overdue payment penalty shows how to read these limits against your own disclosure statement.
Step-by-Step: What To Do If You Are Harassed
- Stay calm and do not respond to threats. Responding in anger can make things worse and may be used against you.
- Collect evidence. Take screenshots of messages, save call logs and note dates, times, numbers and names. Ask contacts who were messaged to send you screenshots.
- Check what you owe. Compare the amount demanded with your loan agreement, disclosure statement and payment receipts.
- Write to the lender. Use the official contact channel, describe what happened and ask it to stop. Keep a copy.
- Pay only through official channels if you agree you owe the amount, and keep the receipt.
- File complaints. Choose the right agency (see below).
- Seek legal help if needed. The Public Attorney's Office assists qualified persons, and many local governments have legal aid desks.
Where to Report
| Problem | Where to report |
|---|---|
| Unfair collection by a lending or financing company | The SEC, which supervises these companies |
| Misuse of your personal data, contact messaging, public posting | The National Privacy Commission, which publishes complaint guidelines on privacy.gov.ph |
| Threats, extortion, online harassment | The police, including the PNP Anti-Cybercrime Group |
| Shaming posts on social media | The platform's reporting tools, plus the agencies above |
| Unrecorded or fake lending apps | The SEC and the app store |
How to Keep Good Evidence
- Screenshot the full message, including the number or account name and the date and time.
- Save call logs and note the length and time of calls.
- Keep copies of your loan agreement, disclosure statement and every receipt.
- Back up your files somewhere safe.
- Write a short timeline: what happened, when and who was involved.
- Do not edit screenshots or alter messages.
Common Myths
"They can have me arrested for not paying." Non-payment of a loan alone is not a crime, and the Constitution says no person shall be imprisoned for debt. Fraud and other offenses are separate matters.
"If I allowed contact access, they can message anyone." Under SEC rules, contacting people in your list other than your named guarantors or co-makers is prohibited even with consent.
"Registered lenders cannot break the rules." Registered lenders can and do breach rules, which is why complaints are accepted against them.
"Collection calls are always harassment." Reasonable reminders are allowed. Threats, insults, shaming and third-party contact are not.
Applying These Rules to Specific Situations
If you are looking at what borrowers have reported about a particular lender, see our article on what borrowers report in Pesoloan harassment reviews, which separates documented material from allegations. For help with a notice you have received, read how to check a demand letter. To check whether a lender is recorded before you borrow, see how to check if a lending app is SEC registered.
If you are comparing lenders before you borrow, our loan comparison for Filipino borrowers helps you see terms side by side before you decide.
Next Steps
If you want to borrow again, see lenders with clear terms before you accept any offer.
FAQs
Can a lender call my relatives or friends?
Not unless they are the guarantors or co-makers you named. SEC rules prohibit contacting other people in your contact list, even if you gave consent.
Can a lender post my photo or debt online?
No. Disclosing or publicizing a borrower's debt to shame them is an unfair collection practice.
Can I be jailed for unpaid online loans?
Non-payment of debt alone is not a crime in the Philippines. Be careful with messages that threaten arrest and verify them.
What if I cannot pay?
Contact the lender before the due date, ask for options and get any agreement in writing. Keep receipts and records of every exchange.
Sources We Checked
- BusinessWorld: SEC cracks down on unfair debt collection practices
- ACCRALAW: Lenders beware, the crackdown on illegal online cash companies
- Manila Bulletin: SEC orders 6 lending firms to stop unfair collection methods
- Daily Tribune: SEC flags Myloan for abusive collection practices (Feb 2026)
- Inquirer Business: HC Consumer Finance fined for abusive debt collection
- National Privacy Commission: filing a complaint
Pesoloan Editorial Team. We research online lending in the Philippines and check company and registration details against public SEC records before publishing. Our articles separate documented facts from user reports and list their sources. Learn more on our author page and in our editorial policy.