NPC to online lending apps: Stop harassing borrowers

The National Privacy Commission (NPC) and financial institutions are calling on online lending application operators to refrain from harassing their borrowers through the unauthorized use of their personal data.

In a joint statement on Wednesday, NPC, the Philippine Finance Association, Fintech Alliance.ph and non-bank financing sectors condemned the excessive collection of personal data by some online lending platforms.

Some pieces of information are harvested “without legitimate purpose”, they said, citing the clients’ contact list and photo gallery, both of which are unnecessary in determining creditworthiness.

“We likewise reiterate our appeal to non-compliant operators of online lending apps to refrain from exploiting borrowers by using the borrowers’ personal data to shame and coerce them into paying their loans through unauthorized and unfair use of their personal data,” they said.

The organizations said the operators should act with a “strong moral code” especially amid the challenges brought about by the pandemic to the borrowers.

The online lending firms, they said, should adhere to the Code of Conduct, Code of ethics and Code of Collection Standards and ethics created by the Fintech Alliance.ph and the Philippine Finance Association. The codes were crafted and standardized in the sector to protect the consumers.

In addition, the privacy watchdog reminded the lending app operators to follow the Data Privacy Act of 2012 and the related laws when processing the customers’ personal data.

“We call on these non-compliant lending entities to use lawful and reasonable methods in evaluating loan applicants’ creditworthiness as well as in debt collection practices by upholding data subject rights without resorting to unfair debt collection practices and harassment of borrowers such as the use of insults or profane language, violent threats or false representation and unnecessarily exposing their borrowers’ personal data to unauthorized persons,” they added.

Last month, the NPC banned four online lending apps due to their unauthorized use of personal data, resulting in harassment and shaming of borrowers. These apps are Juanhand, Pesopop, Cashjeep and Lemon Loan.

NPC has been cracking down on online lending app operators, issuing a ban against 26 lending apps in 2019 for failing to respond to allegations lodged against them, including the use of personal data to shame delinquent borrowers.

These are no longer publicly available for download, installation or use, NPC said.