Manila, Philippines — The Senate on Monday, March 9, unanimously approved on third and final reading Senate Bill No. 1744, also known as the Fair Debt Collection Practices Act, a landmark measure aimed at regulating debt collection practices and protecting borrowers from abuse, harassment, and misrepresentation.

With a 20‑0‑0 vote, the Upper Chamber passed the bill sponsored by Senate Deputy Minority Leader Joel Villanueva, signaling broad bipartisan support for stronger safeguards against abusive collection methods, particularly those linked to online lending applications.

The measure seeks to draw clear legal boundaries on how debts may be collected, especially amid a surge in complaints involving harassment, public shaming, and misuse of personal data by some lenders and collection agents.

‘Not Built on Fear and Intimidation’

In sponsoring the bill, Senator Villanueva emphasized that access to credit should never come at the cost of human dignity.

“With the passage of this measure, we take a significant step toward ensuring that financial access in our country is not built on fear and intimidation, but on fairness, accountability, and respect for human dignity,” Villanueva said.

He stressed that while debt obligations must be honored, the process of collection must remain lawful, ethical, and humane.

“This measure is not about encouraging people to evade their obligations. However, I want to emphasize that while paying debt is an obligation, having debt is not a sin,” he added.

Surge in Complaints Against Online Lending Apps

During plenary deliberations, Villanueva cited alarming data from government agencies highlighting the scale of abusive debt collection practices in recent years.

From August 2024 to January 2026, the Presidential Anti‑Organized Crime Commission (PAOCC) recorded 47,144 complaints against abusive online lending applications.

He also cited data from the National Privacy Commission, which received 2,244 complaints against Online Lending Apps (OLAs) between 2018 and 2025, most of which involved unauthorized access, misuse, and disclosure of personal information.

“What we have seen in recent years is deeply alarming. Borrowers are hunted, shamed, and threatened simply for borrowing small amounts of money for their daily needs. Mr. President, this is not debt collection. This is harassment,” Villanueva said.

Prohibited Debt Collection Practices

Under Senate Bill No. 1744, the following acts are explicitly prohibited:

• Threats of violence or criminal harm
• Use of insults, obscene, or profane language
• Public shaming or unauthorized disclosure of personal information
• Repeated, unreasonable, or untimely communications
• Contacting employers, coworkers, or unrelated third parties
• Misrepresentation, deception, or intimidation
• Collection of any amount beyond the principal obligation without express authorization in the loan agreement

The bill aims to prevent debt collectors from weaponizing fear, shame, or misinformation to pressure borrowers into repayment.

Penalties and Remedies

Lending companies and collection agencies that violate the law may face administrative fines of up to ₱1 million, while affected borrowers may pursue civil damages of up to ₱30,000 against collectors found to have engaged in abusive practices.

At the same time, the measure preserves the right of legitimate lenders to collect debts—provided such efforts comply with lawful and ethical standards.

“Debt collection must remain lawful, fair, and humane. It prohibits abusive, deceptive, and harassing collection practices while protecting the dignity and privacy of borrowers. At the same time, it ensures that legitimate lenders can still collect debts through lawful and ethical means,” Villanueva said.

Next Steps

With Senate approval secured, the Fair Debt Collection Practices Act now moves forward in the legislative process. Once enacted into law, it is expected to serve as a critical consumer protection measure, particularly for vulnerable borrowers, including Overseas Filipino Workers and low‑income individuals who rely heavily on online lending services.

Money News

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