SEC, NPC warn public vs. loan apps with unfair debt collection practices

Authorities from the Securities and Exchange Commission (SEC) and the National Privacy Commission (NPC) advised the public to be skeptical in using some downloadable loan applications that may be violating privacy laws and standard protocols for debt collection.

According to a report by Chino Gaston on GMA News TV's State of the Nation with Jessica Soho on Tuesday, Darwin—not his true name—was one of those who tried a mobile app for loans.

He was asked to submit a picture, an ID, payslip, and other documentary requirements.

His loan amounting to P3,000 was smoothly processed but it was already slashed by a 30 percent interest when he received it.

Darwin said he was harassed by the lending company when he failed to pay his outstanding loan.

The firm managed to reach the people on his contact list and even his social media friends.

"Kasi 'yung mga contacts ko po especially my supervisor sa work ay nagtext po sa akin. 'Ang taong ito ay may utang na malaking halaga sa aming kumpanya at nagtatago din sa ibang lending company. Mag-iingat na hindi maloko ng taong ito,'" Darwin said.

He decided to resign from his job out of embarrassment.

Another complainant said that a lending company threatened to post her picture on social media if she will not be able to settle the loan she made through an app.

The SEC already released a memorandum circular to investigate over 1,600 complaints it received against lending companies that were using loan apps.

Unfair debt collection practices include sending violent threats, using harsh words, disclosing the name and other personal information of the borrower in public, and messaging or calling the people on the contact list of the borrower without his/her consent.

Lending companies who will be caught practicing these may be fined P25,000 to P1 million. Their certificate of authority to operate may also be revoked.

The NPC, on the other hand, currently handles 671 complaints it received this year in connection with loan apps that supposedly violated privacy laws in the country.

The SEC, NPC, and the Bangko Sentral ng Pilipinas are jointly developing guidelines to monitor financial services that are using modern technology. —Dona Magsino/LDF, GMA News