Mandaue crafts ordinance against abusive debt collection practices
MANDAUE CITY, Cebu — The City Council here has approved on first reading a proposed ordinance to curb abusive debt collection practices by online lending applications (OLAs), traditional lending firms, financing companies, and other lending entities.
The measure, titled the “Mandaue City Anti-Lending Cyber-Harassment and Privacy Protection Ordinance,” aims to protect residents from cyber-harassment, unauthorized processing of personal information, and other abusive collection practices, particularly those involving borrowers’ relatives, friends, and other contacts.
Under the proposed ordinance, lending entities will be prohibited from:
- harvesting or accessing a borrower’s phone contacts without valid consent,
- using those contacts to demand payment,
- publicly shaming borrowers through electronic communications,
- sending threatening or intimidating messages, and r
- repeatedly calling or messaging individuals in a manner that disrupts their privacy and peace of mind.
READ: Mandaue shutters 6 businesses over various violations
The ordinance also covers traditional lending companies and collection agencies, not just online lenders.
Under the ordinance, the city may exercise jurisdiction over violations as long as the victim or recipient of the alleged harassment is a resident of, or physically present in, Mandaue City at the time the offense was committed, regardless of where the lending company is based.
Councilor Carlo Fortuna, the ordinance’s author, said some online lenders have been sending offensive text messages to people listed in a borrower’s phone contacts to pressure borrowers into settling their obligations.
He said he personally received a messages containing insulting and defamatory statements directed at individuals who are not even parties to the loan.
“Ang nakautang ra gyud ang paninglan, dili apilon ang walay labot; dili na maayo nga paagi, abuso sa katungod. Ubang agencies text blast sa naa sa contact para mauwawan ug pugson sa pagbayad,” Fortuna said.
(Only the ones in debt should be given reminder to pay. Those who have nothing to do with the debt should not be targeted. That is a bad method, an abuse of rights. Other agencies text all a debtor’s contact to shame that person and force her or him to pay.)
Harassment a no-no
While lenders have the right to collect unpaid debts, he said they should not harass relatives, friends, or other third parties who have no legal obligation to pay.
Fortuna added that the proposed measure allows recipients of abusive text messages or other direct messages to file complaints against the sender.
He said cellphone numbers can be traced through registration records with the National Telecommunications Commission, which may help identify the lending agency responsible for the messages.
If approved on final reading and signed, violators may face fines ranging from ₱3,000 to ₱5,000 and/or imprisonment of six months to one year for every offense, subject to the court’s discretion.
Lending entities registered in Mandaue City or operating a branch, satellite office, or payment center in the city may also face the permanent revocation of their business permits.
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