DAVAO CITY - First Congressional District Representative Paolo Duterte has underscored the urgency of passing a law that would protect financial borrowers from public shaming, extortionate interest charges and other vicious online lending practices that continue to claim more victims despite a supposed government crackdown against abusive moneylenders. 

He called on  the Congress to immediate tackle bills that aim to regulate the online lending sector when it resumes session in two weeks, so as to speed up the passage of a law that would expressly prohibit  the unfair, deceptive and shameful  practices resorted to by online loan sharks. 

“More victims  have continued to come out  to report being harassed, shamed, threatened, and forced to pay usurious interest charges. Both the Executive and Congress need to act fast to put an end to these inhumane debt collection practices,” Duterte said. 

Duterte noted  an online petition spearheaded by the Philippine Association of Loan Shark Victims Inc. (PALSVI) has gathered over 32,000 signatures so far in the hope of making its   appeal heard for the government to shut down about 101 online lending apps  (OLAs) that it claims to “threaten, embarrass, intimidate, and cause utter grief to the unfortunate victims.”  

Their members have also filed complaints before the Philippine National Police (PNP)  Anti-Cybercrime Group against several online lenders.  

Several of the OLAs mentioned in the online petition continue to be available on the Google Playstore. These apps remain  despite a policy implemented by Google  in May last year that requires developers of OLAs  in the Philippines to submit a personal loan application declaration and other necessary documentation before they are allowed to publish on the Playstore platform. 

Duterte noted that the Securities and Exchange Commission (SEC) has sustained  its crackdown against erring lending companies by canceling their registrations, shutting them down and securing convictions in courts against some of their operators. 

Despite these efforts, unregistered, illegal and abusive online lending firms have continued to mushroom, he said. 

The absence of a law that would tighten regulation over online moneylenders is among the reasons why abusive debt collectors proliferate in cyberspace, Duterte said. 

“Our laws need to catch up with technology, which while providing ease and convenience to consumers, have also given rise to abusive practices that have ruined not only the reputations, but also the lives of their victims,” the Davao City lawmaker said. 

Duterte said House Bill (HB) 6681, which he filed last December with Benguet Rep. Eric Yap and ACT-CIS Partylist Rep. Edvic Yap, aims to provide the legislation that would regulate the collection practices of lending companies. 

The illegal and abusive practices of online lenders violate the provisions of various laws and regulations, such as the Cybercrime Prevention Act, the Data Privacy Act, the Revised Penal Code, and SEC Memorandum No. 18,  series 2019. 

However, “the State is mandated to legislate measures that will allow the stringent implementation of these penal laws,” the bill’s authors said. 

Under HB 6681 or the proposed Fair Debt Collection Practices Act, a debt collector is prohibited from engaging in any conduct that is intended to “harass, oppress, humiliate, or abuse any debtor in connection with the collection of a debt.”

These include the use or threat of violence, or other criminal means; the use of obscene and profane language; and the disclosure,  publication or posting of the names and other personal information of the borrowers who allegedly refuse to pay debts.

The measure prohibits the collection of any amount such as interest, incidental fees and other charges, unless such amount is expressly authorized by the agreement creating the debt  or  permitted by law. It also prohibits  false, deceptive and misleading representation in collecting debts.

HB 6681 also holds debt collectors liable for damages in individual or class action suits if found to have  violated provisions of the measure.    

So-called “microloan” apps make it easy for borrowers to obtain loans as they do not require collateral and paperwork, and can be processed in as fast as 24 hours. 

However, many of these online lenders charge usurious interest rates, with victims reporting that they have received only a fraction of the loan  they borrowed, but were required to pay the full amount with interest in less than a week. These onerous conditions were not stated in the terms of the loan. 

If the victims fail to pay even just once, they are subjected to abusive phone calls, threats of physical injuries and other crimes,  and public shaming in social media, or by telling  friends, officemates and relatives through text messages about their failure to settle their debts. 

The PALSVI petition said many victims have lost their jobs, broken off relationships and friendships, and  suffered extreme grief, trauma and depression to the point of wanting to end their lives