Online Loan Scams to Watch Out for in Philippines


Online lending platforms are fast becoming a popular way for consumers in the Philippines to access emergency funds. This trend has been driven by the need for easy and fast loans that can be acquired from the comfort of one’s home or office, without the need for long queues, endless paperwork, and slow processing of loans from traditional brick and mortar lenders. While online lending in the Philippines has made it convenient and faster for borrowers to access cash, it has also given rise to the risk of online scams.

Online loan scams are widespread in the Philippines and present a serious threat to unsuspecting borrowers. According to data released by the Philippine National Police Anti-Cybercrime Group (ACG), in 2020 alone, online scams related to loan apps amounted to more than 2,000 reports. This figure denotes only reported cases, meaning the actual number of cases might be much higher.

In this article, CashLoanPH shall take a deeper look into the different types of online loan scams in the Philippines and how to identify and avoid them.

Advanced Fee Scams

This is one of the most common online loan scams in the Philippines. This type of scam involves lenders asking for upfront fees, such as a processing fee or loan insurance, before releasing the loan amount. Scammers use high-pressure tactics to entice borrowers to pay the fees and may threaten them with legal action or call several times a day until the fees are paid. Once the fees have been paid, the scammers will disappear, and the loan amount will never be released.

To avoid falling victim to advanced fee scams, borrowers need to do their research before applying for a loan online. Reliable lender platforms such as Tala, MoneyCat, and Cashwagon do not ask for any fees upfront. It is important to read reviews and check the credibility of the lender before applying for a loan.

Phantom Debt Collectors

Phantom debt collectors are fake debt collectors who pose as legitimate collectors. They often use information obtained through data breaches and other illegal means to threaten unsuspecting borrowers into paying off non-existent debt. Once intimidation tactics have been applied, they will demand repayment through wire transfers or online banking, making it difficult to recover the money.

If you are contacted by a debt collector, it is crucial to do your due diligence before making any payments. Confirm the identity of the collector by checking the BBB website or by contacting the lender to verify if the collector is legitimate. You can also ask for validation of the loan to confirm the debt that is being collected.

Loan Shark Tactics

Some predatory lenders use illegal tactics to collect payments from borrowers. They may harass or threaten borrowers by phone or text messages, make frequent house calls, or use physical violence if they feel the borrower is not cooperating. They may also post the borrower’s personal information on social media for public humiliation or even blackmail. If you are being threatened or harassed by a loan shark, it is important to take action immediately by contacting the authorities.

The Philippines has implemented several laws to protect borrowers from loan shark tactics. Under Republic Act no. 9474 or the Lending Company Regulation Act of 2007, nagging, violent behavior or any form of intimidation to collect payments from borrowers is illegal. As a borrower, it is important to know your rights and be aware of the law to help you identify when you are being harassed by loan sharks.

How to Avoid Online Loan Scams

Here are some tips to help you avoid online loan scams:

  1. Do your research – It is important to do a thorough background check of the lender before submitting any personal details. Look up reviews from previous customers and check if the lender is legitimate.
  2. Do not pay any upfront fees – Advance fees are a common red flag for fraudulent loan applications or scams. Legitimate lenders will not ask for any fees before releasing the loan.
  3. Verify the identity of the debt collector – Always confirm the identity of the debt collector by requesting their name, company and contact number. You can also ask for a validation notice to confirm the debt that is being collected.
  4. Read the fine print – It is essential to read and understand the terms and conditions of the loan agreement. Some lenders include hidden fees or clauses that may disadvantage the borrower.
  5. Know your rights – Familiarize yourself with the lending and debt collection laws in the Philippines. Being aware of your rights will help you avoid predatory lenders that use illegal tactics to collect payments.


Online lending can be an effective way to get quick access to funds in the Philippines. However, as with any fast and accessible service, online lending can attract fraudulent individuals who are out to scam borrowers. It is crucial for borrowers to be vigilant when applying for loans online and to take necessary precautions to avoid becoming a victim of online loan scams.

By following the tips mentioned above, and using reliable lending platforms, borrowers can take advantage of online lending safely and effectively.

5/5 - (10 votes)
CashLoanPH Changed status to publish 04/04/2023
Skip to toolbar