QUEZON CITY, Philippines — A new legislative measure has been introduced in the House of Representatives seeking to grant regulatory agencies broader powers to shut down predatory online lending applications and impose criminal penalties on abusive debt collectors.
House Deputy Majority Leader and Quezon City 5th District Representative Patrick Michael “PM” Vargas authored House Bill No. 9738, known as the proposed “Fair Debt Collection and Digital Lending Consumer Protection Act.”
The legislation aims to address widespread complaints filed with the Securities and Exchange Commission (SEC) and the National Privacy Commission (NPC) regarding harassment, intimidation, death threats, and public shaming by illegal debt platforms.
“Madalas, kapit sa patalim na ang mga umuutang sa mga digital lenders. Layunin natin silang protektahan mula sa lalong kagipitan dala ng mga mapanakot, abusado, at iligal na paraan ng paniningil,” Vargas stated.
Under the provisions of HB 9738, the SEC would receive explicit authority to issue administrative penalties against non-compliant firms, including fines reaching up to ₱5 million, the immediate issuance of cease-and-desist orders, blacklisting of corporate officers, and the suspension or permanent revocation of operating certificates.
The bill also introduces a mandatory Verified Collection Identity System (VCIS). Under this framework, lending institutions and third-party collection agencies must register all official contact numbers and collection agents with the SEC. Unregistered, deceptive, or anonymous collection efforts would be explicitly banned.
“Sa pamamagitan ng panukalang ito, binibigyan natin ang SEC ng dagdag na awtoridad para linisin ang digital lending sector, ipasara ang mga iligal na OLA, at panagutin sa batas ang mga nangha-harass,” Vargas added.
In addition to administrative penalties, HB 9738 links illegal digital collection practices directly to existing legal frameworks, including the Revised Penal Code, the Data Privacy Act, and the Cybercrime Prevention Act.
Offenses such as cyber-libel, grave coercion, and unauthorized access to personal contact lists would face penalties increased by one degree if carried out through digital platforms.
Vargas cautioned consumers against using unverified financial applications, advising the public to deal exclusively with legitimate, SEC-accredited lenders.
“While we support financial inclusion, we will never tolerate harassment of any kind. Hindi pwedeng kapalit ng pag-utang sa oras ng pangangailangan ang kawalan ng dignidad at seguridad ng ating mga mamamayan,” the lawmaker emphasized.
House Bill 9738 is currently pending review before the House Committee on Banks and Financial Intermediaries in the 20th Congress.