Loan sharks, also known as “five-six money lenders,” pose a significant threat to unsuspecting borrowers in the Philippines. Their predatory practices can lead to severe financial distress, intimidation, and even violence. This article aims to provide a comprehensive overview of loan sharks, their activities, and the legal framework in the Philippines.
What Is Loan Sharking?
Loan sharking involves lending money at exorbitant interest rates and using aggressive tactics to collect debts. Loan sharks typically operate outside of the regulated financial system and engage in illegal activities such as extortion, harassment, and threats.
Is Loan Sharking Illegal in the Philippines?
Yes, loan sharking is illegal in the Philippines under Republic Act 3765, known as the “Truth in Lending Act.” This law regulates lending practices, sets limits on interest rates, and prohibits predatory collection methods.
Where to Report Loan Sharks in the Philippines?
Individuals who encounter loan sharks should immediately report them to the following authorities:
- Philippine National Police (PNP) – Dial 117 or contact the local police station
- Securities and Exchange Commission (SEC) – File a complaint online at https://complaints.sec.gov.ph or call (02) 8727-3213
- Bangko Sentral ng Pilipinas (BSP) – Call the BSP Consumer Assistance Office at (02) 8708-7087 or email consumeraffairs@bsp.gov.ph
Famous Loan Sharks
Some notorious loan sharks in the Philippines include:
- 5-6
- Bombita
- Tagilid
- Paluwagan
How to Deal with Loan Sharks in the Philippines?
If you are contacted by a loan shark, remain calm and follow these steps:
- Do not engage in threats or violence.
- Report the loan shark to the authorities immediately.
- Seek legal assistance from a lawyer who specializes in debt collection.
- Document all interactions with the loan shark, including dates, times, and any threats made.
Can a Loan Shark Take You to Court?
Yes, loan sharks may file a lawsuit against borrowers who fail to repay their loans. However, if the loan agreement violates the Truth in Lending Act, the borrower may have legal defenses against such claims.
Loan Shark Meaning in Tagalog
In Tagalog, loan sharks are known as “tagapagpautang ng limang-anim” or simply “limang-anim.”
Loan Shark Law
The legal framework governing loan sharking in the Philippines is based on the Truth in Lending Act. This law sets limits on interest rates, prohibits certain collection practices, and provides borrowers with legal remedies against predatory lenders.
