Ordinance vs abusive debt collectors pushed

CEBU, Philippines — The Mandaue City Council is seeking to crack down on abusive debt collection practices by both online lending applications (OLAs) and traditional lending firms through a proposed ordinance that would penalize cyber-harassment, illegal contact harvesting, and other deceptive collection methods.

Authored by Councilor Carlo Fortuna, the proposed measure, titled the “Mandaue City Anti-Lending Cyber-Harassment and Privacy Protection Ordinance,” aims to protect residents from lending companies that allegedly resort to harassment, public shaming, and the unauthorized use of borrowers’ personal data in collecting unpaid loans.

“Uso na kaayo nang makadawat lang og text, mga ngil-ad kaayo nga ipanulte sa pagpaningil,” said Fortuna, adding that he himself had received such messages.

“Apparently, mao nay gipangbuhat sa mga lending agencies nga murag nag-contact harvesting sa cellphone, unya text blast para lang tanan nga naa sa contact para lang katong nakautang mauwawan,” the councilor added.

Fortuna said those who receive such messages may also find them disturbing and offensive.

The councilor said such a practice is unacceptable because it clearly violates the rights of other people.

“Tinuod nga nagpautang ka, pero kung maningil ka, ang paninglan ang nakautang, dili magpasagad og padala og mga mensahe nga ngil-ad kaayo sa lain-laing tawo, ang tuyo pakauwawan ang laing tawo,” Fortuna said.

Fortuna said there is a law requiring everyone to respect the rights of others, even while exercising their own rights.

“Kung ordinansa na atong gipapasar, kung kinsa man gani ang nakadawat sa ingon ani nga mga messages, pwede gyud kasuhan ang nagpada ana nga message, ug ma-trace man na,” he said.

The councilor added that since cellphone numbers are registered, authorities can trace the sender even if the lending company is not based in Mandaue City.

Fortuna said only the borrower should be held accountable for the debt and that people who have no involvement should not be dragged into collection efforts.

“Kung ikaw taga-Mandaue ka ug nakadawat ka ana, pwede na dayon pasakaan og kaso diri sa dakbayan para maundang na na nga pamaagi,” he said.

The proposal cited the authority of local governments under the Local Government Code to enact ordinances promoting public safety, peace and order, and the welfare of residents.

Under the ordinance, both online and traditional lending companies, financing firms, collection agencies, and their officers may be held liable for unfair debt collection practices committed against Mandaue City residents, even if the companies are based outside the city.

The measure prohibits the unauthorized processing and harvesting of borrowers’ phone contacts, including the use of third-party contact information to demand payment or pressure individuals who are not legally responsible for the debt.

It also bans cyber libel and public shaming, such as posting or sending messages labeling borrowers or innocent third parties as “scammers,” “thieves,” or other defamatory descriptions on social media or messaging platforms.

The ordinance likewise prohibits coercion through electronic means, threats and intimidation, and repeated calls or messages that disrupt the peace, privacy, and well-being of victims.

The proposed measure defines a “third-party individual” as someone who is neither the borrower nor a registered co-maker or guarantor but is nevertheless subjected to debt collection efforts.

It also provides that corporate officers—including presidents, chief executive officers, chief operating officers, compliance officers, board members, general managers, and managing partners—may be held personally liable alongside their companies for violations.

Under the proposal, violators may face fines ranging from P3,000 to P5,000 for every offense and/or imprisonment of six months to one year, subject to the court’s discretion.

In addition, lending firms registered in Mandaue City or operating branches, satellite offices, or payment centers within the city may face the permanent revocation of their business permits if found guilty of violating the ordinance.

The proposal also states that the ordinance would apply whenever the victim or recipient of the alleged cyber-harassment is a resident of, or physically located in, Mandaue City at the time the offense was committed. (CEBU NEWS)