The Mandaue City Council is proposing an ordinance aimed at protecting residents from abusive debt collection practices allegedly used by online lending applications (OLAs), lending companies, and collection agencies.
Councilor Carlo Fortuna authored the proposed “Mandaue City Anti-Lending Cyber-Harassment and Privacy Protection Ordinance,” which seeks to penalize practices such as cyber-harassment, unauthorized use of personal data, contact harvesting, and public shaming of borrowers.
Fortuna said the measure was prompted by complaints involving debt collectors who allegedly send offensive messages not only to borrowers but also to individuals listed in their phone contacts.
“Uso na kaayo nang makadawat lang og text, mga ngil-ad kaayo nga ipanulte sa pagpaningil,” Fortuna said, adding that he had also received similar messages.
He said some lending companies allegedly access borrowers’ phone contacts and send text blasts to embarrass borrowers by informing unrelated individuals about their unpaid debts.
“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,” he said.
Fortuna said debt collection should only involve the person who owes the money and should not extend to individuals who have no legal responsibility for the loan.
“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,” he said.
Under the proposed ordinance, online and traditional lending companies, financing firms, collection agencies, and their officers may be held liable for unfair debt collection practices committed against Mandaue residents, even if the companies operate outside the city.
The measure prohibits the unauthorized processing and harvesting of borrowers’ phone contacts, including the use of third-party contact information to pressure individuals who are not part of the loan agreement.
It also prohibits public shaming and cyber libel through messages or online posts that label borrowers or unrelated individuals as “scammers,” “thieves,” or other defamatory terms.
The proposed ordinance also covers threats, intimidation, coercion through electronic means, and repeated calls or messages that disrupt the privacy and well-being of victims.
Fortuna said residents who receive such messages may use the ordinance as a basis to file complaints against those responsible.
“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.
He added that registered mobile numbers allow authorities to trace senders even if the lending company is not based in Mandaue City.
The proposal defines a third-party individual as someone who is neither the borrower nor a registered co-maker or guarantor but is subjected to debt collection efforts.
It also allows corporate officers, including company presidents, chief executive officers, compliance officers, board members, general managers, and managing partners, to be held personally liable alongside their firms for violations.
Violators may face fines ranging from P3,000 to P5,000 for each offense and/or imprisonment of six months to one year, subject to the court’s decision.
Lending firms registered in Mandaue City or those operating branches, satellite offices, or payment centers within the city may also face permanent revocation of business permits if found guilty of violating the ordinance.
The proposed measure states that it will apply when the victim or recipient of the alleged cyber-harassment is a Mandaue resident or is physically located in the city when the violation occurs.
Photo courtesy of Unbox
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