Tougher penalties eyed for abusive online lending firms

Senator Win Gatchalian on Monday filed the proposed Fair Debt Collection Practices Act, a priority measure for the 20th Congress, aiming to hold abusive online lending companies fully accountable under the law.

He said the bill seeks to put an end to harassment and intimidation tactics used by some online lending apps (OLAs), particularly against vulnerable borrowers.

“Hindi makatao ang paniningil nang may pananakot at pang-aabuso, lalo na sa mga mahihirap nating kababayan na kapit sa patalim kaya nangungutang (t is inhumane to collect debts through threats and abuse, especially against our poor countrymen who are forced to borrow out of desperation) Gatchalian said.

He cited the case of a Valenzuela City resident who died by suicide following persistent threats and harassment allegedly committed by an online lending platform.

“Isang click lang sa app, pwede ka nang magkapera (In just one click, you can easily get money),” Gatchalian said, adding that while creditors have the right to collect debts, such actions should never result in abuse or loss of life.

The proposed legislation prohibits debt collectors from using threats of violence, profane or obscene language, or publicly disclosing a borrower’s identity. 

The measure also bans harassment, coercion, or any abusive conduct during the collection process.

Violators of the proposed law would face administrative sanctions, including fines of up to P60,000.

Gatchalian said the bill is part of his broader push to protect consumer rights and promote responsible lending and borrowing practices in the digital economy.