TWENTIETH CONGRESS OF THE ] 
REPUBLIC OF THE PHILIPPINES ] 
First Regular Session 
]
SENATE
S.B. No.
370
-u'/
oC > >' "f >:t
25 JULIO P2:10
llECQVcD S'i.
Introduced by SEN. WIN GATCHALIAN
AN ACT
REGULATING DEBT COLLECTION PRACTICES TO PROTECT DEBTORS 
FROM ABUSES, HARASSMENT, UNFAIR TREATMENT, AND 
MISREPRESENTATION
EXPLANATORY NOTE
With the steady growth of the Philippine economy, the increase in the 
purchasing power of middle-class Filipinos, and the emerging reliance on technology 
and the internet, there has been an alarming increase in complaints on widespread 
use of abusive, deceptive, and unfair debt collection practices by many financing 
companies, lending companies, and debt collectors in the country.
A number of unscrupulous financing companies, lending companies, and debt 
collectors have taken advantage of borrowers by using false or misleading 
advertisements to lure them to borrow at unreasonable interest rates, by continuously 
harassing them and their phonebook contacts, or by using offensive or threatening 
tactics in order to collect the debts owed to them or their clients. Such abusive debt 
collection practices have contributed to a number of unwarranted personal 
bankruptcies, marital problems, loss of employment, depression, stress, and invasion 
of individual privacy.


c-
Acting on numerous complaints with regard to unfair debt collection practices, 
the Securities and Exchange Commission (SEC) issued on 19 August 2019 
Memorandum Circular No. 18 on the "Prohibition on Unfair Debt Collection Practices 
of Financing Companies (FC) and Lending Companies (LC)". However, despite the 
SEC'S issuance of MC No. 18, unfair debt collection practices continue to plague 
financial consumers in the Philippines, especially with the growing popularity of online 
lending applications (OLAs).
In response to complaints from financial consumers that OLAs were illegally 
using personal data of clients and those in their contact lists, causing damage to their 
reputation and violating their rights as data subjects, the National Privacy Commission 
(NPC) in turn issued Circular 20-01 in 2020, barring OLAs from harvesting personal 
information, such as phone and social media contact lists, for purposes of harassing 
delinquent borrowers.1
In 2022, Republic Act (RA) No. 11765 or the "Financial Products and Services 
Consumer Protection Act" was signed into law. RA No. 11765 expressly prohibits 
financial service providers from employing abusive collection or debt recovery practices 
against their financial consumers. Notwithstanding this express prohibition against 
abusive debt collection practices under RA No. 11765, as well as under other existing 
administrative regulations, many unscrupulous lenders and debt collectors continue to 
employ unfair and abusive practices in collecting debts, often resorting to harassment, 
threats, and unauthorized disclosure of personal data of financial consumers, causing 
anxiety and fear in the borrowing public. Hence, there is an urgent need for a more 
concrete framework to regulate debt collection practices in the country to put an end 
to these abusive practices and to adequately protect financial consumers.
Accordingly, this measure aims to minimize, if not eliminate, unfair and abusive 
debt collection practices by prohibiting acts and conduct amounting to harassment or 
abuse, or making false or misleading representations, in relation to debt collection. 
This measure likewise specifies and prohibits acts and conduct considered as unfair 
debt collection practices. In addition, this bill provides minimum standards for
1 National Privacy Commission, Online lenders barred from harvesting borrowers' phone and social-media contact 
list, says Privacy Commission, NPC, at https://privacv.qov.ph/online-lenders-barred-from-harvestinq-borrowers- 
Dhone-and-social-media-contact-list-savs-privacv-commission/ (last visited June 24, 2025).


allowable debt collection practices and sets guidelines to ensure confidentiality of 
information and transparency in transactions, with the end goal of leveling the playing 
field between creditors and debt collectors on the one hand, and consumer-debtors
on the other.
In view of the foregoing, passage of this bill is earnes^sough]
GATCHAL


CM } f f
TWENTIETH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
S. B. No.
SENATE
370
of f)t %itr.-tuxv
25 JULIO P2:10
RKEiVED 8Y:
Introduced by SEN. WIN GATCHALIAN
AN ACT
REGULATING DEBT COLLECTION PRACTICES TO PROTECT DEBTORS 
FROM ABUSES, HARASSMENT, UNFAIR TREATMENT, AND 
MISREPRESENTATION
Be it enacted by the Senate and the House of Representatives of the Philippines 
in Congress assembled:
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SEC. 1. Short Title. - This Act shall be known as the "Fair Debt
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Collection Practices Act".
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SEC. 2. Declaration of Policy- It is hereby declared a State policy to
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prohibit and eliminate the use of abusive, deceptive, and unfair debt collection
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practices to protect debtors against abuse and harassment from unscrupulous
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lenders and debt collectors.
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SEC. 3. Definition of Terms. - As used in this Act, the following terms
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are defined as follows:
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(a) Debt Collector refers to any person (i) who uses any
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instrumentality or any business, the principal purpose of which is
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the collection of any debts, or (ii) who regularly collects or
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attempts to collect, directly or indirectly, debts owed or due or
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asserted to be owed or due another. It also includes any creditor
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who, in the process of collecting his own debts, uses any name
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other than his own to give the impression that a third person is


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collecting or attempting to collect such debt. It shall also include 
a debt collection agency or a third-party service provider engaged 
by a creditor for the purpose of collecting debts owed by another. 
This definition shall not include:
(i) 
A person who is collecting or attempting to collect a debt 
of which they are the original creditor or owner;
(ii) 
A business that acquires a debt or debts through the 
seizure of accounts receivable under a security agreement;
(iii) 
A corporation that purchases a debt or debts through 
acquiring or merging with a business in a transaction that 
includes the transfer of accounts receivables;
(iv) 
A person to whom the contract that gave rise to the debt 
was assigned for the purpose of financing the transaction;
(v) 
An officer or employee of the creditor who, in the name of 
the creditor, collects the debt for the creditor;
(vi) 
Any person or entity who acts a debt collector for another 
person or entity who are related by common ownership or 
affiliated by corporate control: Provided, That the person 
or entity collects the debt for persons or entities to whom 
it is related or affiliated, and its principal business is not 
the collection of debts;
(vii) 
Any officer or employee of government, national or local, 
to the extent that collecting or attempting to collect any 
debt is in the performance of their official duties;
(viii) Any person while serving or attempting to serve legal 
process on any other person in connection with the judicial 
enforcement of any debt; and
(ix) Any attorney-at-law collecting a debt as attorney on behalf 
of and in the name of a client.
(b) Co/7facf refers to communications by telephone, mobile phone, 
facsimile, e-mail, automated call system, text messaging, or any 
other electronic modes, or in person, including messages left for


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a debtor with another person or by voicemail or on an answering 
machine, or any other form of communication not specifically 
excluded. This definition shall not include communications that 
the debtor has expressly consented to or solicits in advance.
(c) 
Creditor refers to a person to whom a debtor owes a debt or 
who has extended credit to a debtor, including but not limited to 
credit in the form of a sale on credit, a loan of money, or the 
provision of goods and services. It includes a financing company 
and a lending company.
(d) 
DeZif refers to a monetary obligation enforceable at law owed by 
a debtor, including but not limited to a purchase on credit, 
accounts receivable, a loan of money, or the provision of goods 
or services.
(e) 
Debtor to an individual who has an obligation for a debt, 
including but not limited to the owner of a sole proprietorship, a 
member of a partnership, or an individual who has provided a 
personal guarantee.
(f) 
Express C*o/i5e/;f refers to consent in a verifiable form, including 
but not limited to writing and audio recordings.
(g) 
Financing company refer to a corporation, except banks, 
investment houses, savings and loan associations, insurance 
companies, cooperatives, and other financial institutions 
organized or operating under other special laws, which is 
primarily organized for the purpose of extending credit facilities 
to consumers and to industrial, commercial, or agricultural 
enterprises, by direct lending or by discounting or factoring 
commercial papers or accounts receivable, or by buying and 
selling contracts, leases, chattel mortgages, or other evidences of 
indebtedness, or by financial leasing of movable as well as 
immovable property.
(h) 
Lending company veievs to a corporation engaged in granting 
loans from its own capital funds or from funds sourced from not


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(i)
more than nineteen (19) persons. It shall not be deemed to 
include banking institutions, investment houses, savings and loan 
associations, financing companies, pawnshops, insurance 
companies, cooperatives and other credit institutions already 
regulated by law. The term shall be synonymous with lending 
investors.
Representative means a person, other than the debtor or 
creditor, that is duly authorized by the debtor or creditor, as 
applicable, to contact or be contacted in relation to the debt.
SEC. 4. Acquisition of Location Information. - Any financing 
company, lending company, or debt collector communicating with any person 
other than the debtor for the purpose of acquiring location information about 
the debtor shall:
(a) 
Identify themselves, state that they are confirming or correcting 
location information concerning the debtor, and only if expressly 
requested, identify themselves or their employer;
(b) 
Not state that such debtor owes any debt;
(c) 
Not communicate with any such person more than once unless 
requested to do so by such person or unless such creditor or debt 
collector reasonably believes that the earlier response of such 
person is erroneous or incomplete and that such person now has 
correct or complete location information;
(d) 
Not communicate by post card; and
(e) 
Not use any language or symbol on any envelope or in the 
contents of any communication that indicates that the debt 
collector is in the debt collection business or that the 
communication relates to the collection of debt.
The foregoing notwithstanding, after a financing company, lending 
company, or debt collector discovers that the debtor is represented by an 
attorney with regard to the subject debt and has knowledge, or can readily 
ascertain, such attorney's name and address, such financing company, lending


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company, or debt collector shall be prohibited from communicating with any
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person other than the attorney, unless the attorney fails to respond within a
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reasonable period of time to the communication from the debt collector.
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SEC. 5. Allowable Debt Collection Practices. - Financing
5 
companies, lending companies, and debt collectors may resort to all reasonable
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and legally permissible means to collect amounts due them under the loan
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agreement: Provided, That in the exercise of their rights and performance of
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their duties, they must observe good faith and reasonable conduct, and refrain
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from engaging in abusive, unfair, and untoward conduct prohibited under this
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Act.
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SEC. 6. Prohibition Against Harassment or Abuse. - Financing
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companies, lending companies, and debt collectors shall not engage in any
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conduct the natural consequence of which is to harass, oppress, or abuse any
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debtor in connection with the collection of a debt. The following acts shall be
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considered a violation of this section:
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(a) The use or threat of use of violence or other criminal means to
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harm the physical person, reputation, or property of the debtor
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or their family;
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(b) The use of obscene or profane language or language the natural
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consequence of which is to abuse or shame the 
debtor or their
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family, or which amounts to 
a criminal 
act or offense under
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applicable laws;
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(c) 
The disclosure, publication, or posting of the names and other
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personal information of the debtor who allegedly refuses to pay
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debts, except as may be allowed under Section 11 of this Act;
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(d) The advertisement for sale of any debt to coerce payment of the
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debt;
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(e) 
Causing the telephone or mobile phone of the debtor, their family,
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or any person other than the debtor in relation to Section 4 of this
30 
Act, to ring repeatedly or continuously, or engaging any such


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person in telephone or mobile phone conversation repeatedly or
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continuously, with intent to annoy, abuse, or harass;
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(f) 
Making telephone or mobile phone calls without meaningful
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disclosure of the caller's identity, except in instances where such
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disclosure is specifically prohibited under this Act; and
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(g) 
Any analogous circumstances.
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SEC. 7. False or Misleading Representations. - Financing
8 
companies, lending companies, and debt collectors shall not use any false,
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deceptive, or misleading representation or means in connection with the
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collection of any debt. The following acts shall be considered a violation of this
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section:
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(a) 
The unauthorized use of any badge, uniform, or facsimile thereof;
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(b) 
The false representation of the following:
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(i) 
The character, amount, or legal status of any debt; or
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(ii) 
Any services rendered or compensation which may be
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lawfully received by any debt collector for the collection of
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the debt;
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(c) 
The false representation or implication that any individual is an
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attorney or that any communication is from an attorney;
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(d) 
The representation or implication that non-payment of any debt
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will result in arrest or imprisonment of any person, or the seizure,
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garnishment, attachment, or sale of any property or wages of any
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person, unless such non-payment is unlawful and the debt
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collector or creditor intends to take legal action;
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(e) 
The use of threat to take any action that cannot be legally taken;
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(f) 
The false representation or implication that a sale, referral, or
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other transfer of any interest in a debt shall cause the debtor to:
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(i) 
Lose any claim or defense to payment of the debt; or
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(ii) 
Become subject to any practice prohibited by this Act;
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(g) The false representation or implication that the debtor committed
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any crime or other similar conduct in order to disgrace the debtor;


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(h) 
Communication or threatening to communicate to any person 
credit information of the debtor which is known or which should 
be known to be false, including the failure to communicate that a 
disputed debt is disputed;
(i) 
The use or distribution of any written communication which 
simulates, or is falsely represented to be, a document authorized, 
issued, or approved by any court, official, or agency of the 
government, national or local, or which creates a false impression 
as to its source, authorization, or approval;
(j) 
The use of any false representation or deceptive means to collect 
or attempt to collect any debt, or to obtain information concerning 
a debtor;
(k) 
The failure to disclose clearly in all communications made to 
collect a debt or to obtain information about a debtor that the 
debt collector is attempting to collect a debt and that any 
information obtained will be used for that purpose, except in 
instances where disclosure of such information is specifically 
prohibited in this Act;
(l) 
The false representation or implication that accounts have been 
turned over to innocent purchasers for value;
(m) 
The use of any business, company, or organization name other 
than the true name of the financing company, lending company, 
or debt collector's business, company, or organization;
(n) 
Giving any person, directly or indirectly, by implication or 
otherwise, any false or misleading information in relation to the 
collection of debt, including but not limited to references to the 
police, a law firm, prison, credit history, court proceedings, or a 
lien or garnishment; and
(o) 
Any analogous circumstances.
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SEC. 8. Unfair Collection Practices. - Financing companies, lending
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companies, and debt collectors shall not use unfair or unconscionable means


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to collect or attempt to collect any debt. The following acts shall be considered
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a violation of this section:
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(a) The collection of any amount other than the principal obligation,
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including any interest, fee, charge, or incidental expense, unless
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such amount is expressly authorized by the agreement creating
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the debt or permitted by law;
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(b) The acceptance by a debt collector from any person of a check or
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other payment instrument postdated by more than five (5) days,
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unless such person is notified in writing of the debt collector's 
intent to deposit such check or instrument not less than three (3) 
business days prior to such deposit;
other postdated payment instrument for the purpose of 
threatening or instituting criminal prosecution;
Depositing or threatening to deposit any postdated check or other 
postdated instrument prior to the date on such check or 
instrument;
Causing charges to be made to any person for communications 
by concealment of the true purpose of the communication, 
including but not limited to collect telephone calls and telegram 
fees;
Taking or threatening to take any non-judicial action to effect 
dispossession or disablement of property if —
There is no present right to possession of the property 
claimed as collateral through an enforceable security 
interest;
There is no present right to take possession of the 
property; or
The property is exempt by law from such dispossession or 
disablement; and
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(ii)
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(iii)
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(g) 
Using any language or synnbol, other than the debt collector's
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address, on any envelope when communicating with a debtor by
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mail or by telegram.
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SEC. 9. Other Prohibited Acts and Practices. - No debt collector
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shall commit any of the following prohibited acts and practices:
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(a) 
Collecting or attempting to collect money for a creditor except on
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the belief in good faith that the money is due and owing by the
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debtor to the creditor;
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(b) 
Failure to provide a contact number for the debtor to call when
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the debt collector uses an automated call system to contact the
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debtor;
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(c) 
Collecting or attempting to collect a debt without providing the
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real name of the agent or representative of the debt collector, the
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contact number, the registered 
name, and address of the debt
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collector;
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(d) 
Making any arrangement with a debtor to accept a sum of money
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that is less than the amount of the balance due and owing to a
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creditor as final settlement without the prior express consent of
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the creditor;
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(e) 
Failure to provide a written report on the status of the account of
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any person with whom the debt collector transacts with;
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(f) 
Making any call to the debtor or any other person other than the
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debtor for the purpose of collecting or attempting to collect a debt
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on any day outside the window of 8 AM to 9 PM;
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(g) 
Directly or indirectly threatening or stating an intention to proceed
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with any action for which the debt collector does not have the
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prior express consent of the creditor or for which there is no
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lawful authority;
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(h) 
Continuing to collect or attempting to collect money from, or
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continuing to communicate with:


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(i) 
A person who has informed the debt collector that they are 
not the debtor, unless the debt collector has taken all 
reasonable precautions to ensure that the person is in fact 
the debtor; or
(ii) 
The debtor, after they have informed the debt collector, 
through any verifiable means, that the debt is in dispute 
and that the debtor wishes the creditor to take the matter 
to court;
(i) 
Contacting the debtor's spouse, relative, neighbor, friend, or 
acquaintance unless the contact is limited to the purpose of 
confirming or correcting the debtor's residential address or 
contact details;
(j) 
Contacting the debtor's employer for any purpose other than to 
confirm the debtor's employment status, business title, and the 
address of the business, in preparation for legal proceedings;
(k) 
Contacting the debtor after the debtor has notified the debt 
collector in writing to communicate only with the debtor's 
representative, providing therein the current address and 
telephone number of such representative for the purpose of:
(i) 
Making reasonable arrangements to discuss the debt with 
the debt collector; and
(ii) 
Discussing the debt with the debt collector in accordance 
with the arrangements;
(l) 
Contacting a debtor at their place of employment after the debtor 
has requested the debt collector to not to contact the debtor in 
their place of employment: Provided, That the debtor makes 
reasonable arrangements to discuss the debt with the debt 
collector and discusses the debt with the debt collector in 
accordance with such arrangements;
(m) 
Communicating information about the debt or the existence of 
the debt with any person other than the debtor, a guarantor of 
the debt, the debtor's representative, or the creditor of the debt.
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unless the debtor has expressly consented to communicating 
such information to persons other than those enumerated herein;
(n) 
Refusing to provide sufficient information on the identity of the 
original and current creditor, as well as the details of the debt, 
upon request of the debtor;
(o) 
Entering into or arranging automatic wage or salary assignments 
with a debtor or the employer of a debtor; or
(p) 
Canceling or altering a payment agreement with a debtor when 
the debtor has complied with the terms of the agreement and the 
debtor's financial circumstances have not changed materially, 
unless the debtor has misrepresented the debtor's financial 
circumstances.
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SEC. 10. Prohibited Agreements. — Any agreement entered into by
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the debtor and the debt collector shall be deemed void if that agreement:
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(a) 
Misrepresents the rights and powers of a person collecting or
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attempting to collect a debt;
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(b) 
Misrepresents the obligations or legal liabilities of a debtor; or
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(c) 
Is misleading as to its true nature and purpose.
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SEC. 11. Confidentiaiity of Information. - Creditors shall keep
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strictly confidential the data on the debtor, except under the following
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circumstances:
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(a) 
Disclosure of information with the written consent of the debtor;
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(b) 
Release, submission, or exchange of customer information with
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other financial institutions, credit information bureaus, lenders,
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their subsidiaries and affiliates;
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(c) 
Upon orders of a court of competent jurisdiction or any
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government office or agency authorized by law;
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(d) 
Disclosure by creditors to debt collectors, counsels, and other
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agents to enforce their rights against the debtor; and
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(e) 
Disclosure to third parties, such as insurance companies, solely
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for the purpose of insuring the creditor from default of the debtor
11


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or other credit loss, or insuring the debtor from fraud or
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unauthorized charges.
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SEC. 12. Issuance of Receipts. - Every debt collector shall issue an
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acknowledgment receipt for all cash transactions, payments made in person,
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or payments made by the debtor. Such acknowledgment receipt shall contain
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the following information:
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(a) 
The date the amount is collected or received;
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(b) 
The name of the debtor;
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(c) 
The 
name of the person for whom the debt collector acts 
on
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behalf of; and
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(d) 
The amount received from the debtor.
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SEC. 13. Settlement Agreement. - Once a debt collector reaches a
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settlement agreement with a debtor and the amount set in the settlement
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agreement has been paid in full, the debt collector shall issue to the debtor a
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receipt containing the following information:
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(a) 
The amount paid;
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(b) 
The name of the creditor or creditors; and
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(c) 
A statement that the amount received is in final settlement of the
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debt or debts owing.
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SEC. 14. Request for Accounting. - A debt collector must provide
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the debtor, upon request, with a complete accounting of all the details of the
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debt: Provided, That if such accounting is not in the possession of the debt
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collector, the debt collector must request the creditor to provide the same.
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Provided, further, That if within thirty (30) days after receiving a request for an
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accounting from the debt collector, the creditor has not provided a complete
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accounting of the debt, the debt collector must:
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(a) Inform the debtor in writing that it cannot provide the accounting
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and the reasons for the same; and
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(b) Cease all collection activity for that account and not resume
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collection activity until the accounting is provided.
12


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A debtor may request a complete accounting only once every six (6)
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months, unless the debt collector fails to provide the complete accounting as
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requested.
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SEC. 15. Administrative Penalties. - The Securities and Exchange
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Commission (SEC) and the Bangko Sentral ng Pilipinas (BSP) shall issue their
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respective rules and regulations for the implementation of the provisions of this
7 
Act and for the imposition of reasonable administrative penalties for violations
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thereof.
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SEC. 16. Civil Liability. — (a) Amount of Damages. - Any financing
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company, lending company, or debt collector who violates any of the provisions
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in this Act with respect to any person shall be liable to such person in an amount
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equal to the sum of:
13 
(i) 
Any actual damage sustained by such person as a result of the
14 
violation;
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(ii) 
In the case of any action by an individual, such additional
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damages as the court may allow, but not exceeding Thirty
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Thousand Pesos (Php. 30,000.00); or
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(iii) 
In the case of a class action, such amount for each named plaintiff
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as could be recovered under paragraphs (i) and (ii), as well as
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such amount as the Court may allow for all other class members:
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Provided, That such additional 
fine shall 
not exceed Sixty
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Thousand Pesos (Php. 60,000.00) or one (1) percent of the net
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worth of the financing company, lending company, or debt
24 
collector, whichever is lower.
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(b) Factors to be Considered by the Court. - In determining the amount
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of liability in any action under paragraph (a) of this section, the court shall
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consider, along with other relevant factors, the following:
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(i) 
In any individual action under paragraph (a)(ii) of this section,
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the frequency and persistence of non-compliance by the financing
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company, lending company, or debt collector, the nature of such
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non-compliance, and the extent to which such noncompliance
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was intentional; and
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(ii) In any class action under paragraph (a)(iii) of this section, the
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frequency and persistence of non-compliance by the financing
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company, lending company, or debt collector, the nature of such
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non-compliance, the resources of the financing company, lending
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company or debt collector, the number of persons adversely
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affected, and the extent to which the financing company, lending
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company, or debt collector's non-compliance was intentional.
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(c) Intent - A financing company, lending company, or debt collector
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may not be held liable in any action brought under this section if the financing
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company, lending company, or debt collector shows by a preponderance of
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evidence that the violation was not intentional and resulted from a bona fide
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error in good faith.
15 
(d) Jurisdiction. - An action to enforce any liability under this Act may
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be brought in any court of appropriate jurisdiction based on the amount of debt
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involved.
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SEC. 17. Separability Clause. — If any provision of this Act is declared
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invalid or unconstitutional, the provisions not affected thereby shall remain in
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full force and effect.
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SEC. 18. Repealing Clause. — All laws, presidential decrees, executive
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orders, presidential proclamations, rules and regulations, or parts thereof
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contrary to or inconsistent with this Act are hereby repealed or modified
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accordingly.
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SEC. 19. Effectivity. — This Act shall take effect fifteen (15) days after
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its publication in the Official Gazette or at least two (2) national papers of
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general circulation.
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Approved,
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