The powers and function of Bangko Sentral are exercised by its Monetary Board, which has

seven members appointed by the President of The Philippines. Under the New Central Bank Act,
one of the government sector members of the Monetary Board must also be a member of the
Cabinet designated by the President.

REPUBLIC ACT No. 3765

AN ACT TO REQUIRE THE DISCLOSURE OF FINANCE CHARGES IN CONNECTION

WITH EXTENSIONS OF CREDIT.

Section 1. This Act shall be known as the "Truth in Lending Act."

Section 2. Declaration of Policy. It is hereby declared to be the policy of the State to protect
its citizens from a lack of awareness of the true cost of credit to the user by assuring a full
disclosure of such cost with a view of preventing the uninformed use of credit to the
detriment of the national economy.

Section 3. As used in this Act, the term

(1) "Board" means the Monetary Board of the Central Bank of the Philippines.

(2) "Credit" means any loan, mortgage, deed of trust, advance, or discount; any
conditional sales contract; any contract to sell, or sale or contract of sale of property
or services, either for present or future delivery, under which part or all of the price is
payable subsequent to the making of such sale or contract; any rental-purchase
contract; any contract or arrangement for the hire, bailment, or leasing of property;
any option, demand, lien, pledge, or other claim against, or for the delivery of,
property or money; any purchase, or other acquisition of, or any credit upon the
security of, any obligation of claim arising out of any of the foregoing; and any
transaction or series of transactions having a similar purpose or effect.

(3) "Finance charge" includes interest, fees, service charges, discounts, and such
other charges incident to the extension of credit as the Board may be regulation
prescribe.

(4) "Creditor" means any person engaged in the business of extending credit
(including any person who as a regular business practice make loans or sells or rents
property or services on a time, credit, or installment basis, either as principal or as
agent) who requires as an incident to the extension of credit, the payment of a
finance charge.

(5) "Person" means any individual, corporation, partnership, association, or other

organized group of persons, or the legal successor or representative of the
 foregoing, and includes the Philippine Government or any agency thereof, or any
other government, or of any of its political subdivisions, or any agency of the
foregoing.

Section 4. Any creditor shall furnish to each person to whom credit is extended, prior to the
consummation of the transaction, a clear statement in writing setting forth, to the extent
applicable and in accordance with rules and regulations prescribed by the Board, the
following information:

(1) the cash price or delivered price of the property or service to be acquired;

(2) the amounts, if any, to be credited as down payment and/or trade-in;

(3) the difference between the amounts set forth under clauses (1) and (2);

(4) the charges, individually itemized, which are paid or to be paid by such person in
connection with the transaction but which are not incident to the extension of credit;

(5) the total amount to be financed;

(6) the finance charge expressed in terms of pesos and centavos; and

(7) the percentage that the finance bears to the total amount to be financed
expressed as a simple annual rate on the outstanding unpaid balance of the
obligation.

Section 5. The Board shall prescribe such rules and regulations as may be necessary or
proper in carrying out the provisions of this Act. Any rule or regulation prescribed hereunder
may contain such classifications and differentiations as in the judgment of the Board are
necessary or proper to effectuate the purposes of this Act or to prevent circumvention or
evasion, or to facilitate the enforcement of this Act, or any rule or regulation issued
thereunder.

Section 6. (a) Any creditor who in connection with any credit transaction fails to disclose to
any person any information in violation of this Act or any regulation issued thereunder shall
be liable to such person in the amount of P100 or in an amount equal to twice the finance
charged required by such creditor in connection with such transaction, whichever is the
greater, except that such liability shall not exceed P2,000 on any credit transaction. Action to
recover such penalty may be brought by such person within one year from the date of the
occurrence of the violation, in any court of competent jurisdiction. In any action under this
subsection in which any person is entitled to a recovery, the creditor shall be liable for
reasonable attorney's fees and court costs as determined by the court.

(b) Except as specified in subsection (a) of this section, nothing contained in this Act
or any regulation contained in this Act or any regulation thereunder shall affect the
validity or enforceability of any contract or transactions.

(c) Any person who willfully violates any provision of this Act or any regulation issued
thereunder shall be fined by not less than P1,00 or more than P5,000 or
imprisonment for not less than 6 months, nor more than one year or both.
 (d) No punishment or penalty provided by this Act shall apply to the Philippine
Government or any agency or any political subdivision thereof.

(e) A final judgment hereafter rendered in any criminal proceeding under this Act to
the effect that a defendant has willfully violated this Act shall be prima facie evidence
against such defendant in an action or proceeding brought by any other party against
such defendant under this Act as to all matters respecting which said judgment would
be an estoppel as between the parties thereto.

Section 7. This Act shall become effective upon approval.

Approved: June 22, 1963

THE TRUTH IN LENDING ACT EXPLAINED

By: Atty.Fred | October 8, 2007 in Banking, Corporate and Investments
51 Replies | Related posts at the bottom of article

What is the Truth in Lending Act?

It is Republic Act No. 3765, which is an act requiring the disclosure of finance charges in
connection with the extension of credit.

What is the policy behind the Truth in Lending Act?

The declared policy behind the law is to protect the people from lack of awareness of the true
cost of credit by assuring full disclosure of such cost, with a view of preventing the
uninformed use of credit to the detriment of the national economy.

Who are covered under the Truth in Lending Act?

The law covers any creditor, which is defined as any person engaged in the business of
extending credit (including any person who as a regular business practice make loans or
sells or rents property or services on a time, credit, or installment basis, either as principal or
as agent) who requires as an incident to the extension of credit, the payment of a finance
charge.

In that definition, what is meant by credit?

It means any loan, mortgage, deed of trust, advance, or discount; any conditional sales
contract; any contract to sell, or sale or contract of sale of property or services, either for
present or future delivery, under which part or all of the price is payable subsequent to the
making of such sale or contract; any rental-purchase contract; any contract or arrangement
for the hire, bailment, or leasing of property; any option, demand, lien, pledge, or other claim
against, or for the delivery of, property or money; any purchase, or other acquisition of, or
any credit upon the security of, any obligation of claim arising out of any of the foregoing; and
any transaction or series of transactions having a similar purpose or effect.

In the same definition, what is meant by a finance charge?

 A finance charge includes interest, fees, service charges, discounts, and such other charges
incident to the extension of credit as may be prescribed by the Monetary Board of the
Bangko Sentral ng Pilipinas through regulations.

What are the information required to be furnished to the debtor or borrower?

(1) the cash price or delivered price of the property or service to be acquired;
(2) the amounts, if any, to be credited as down payment and/or trade-in;
(3) the difference between the amounts set forth under clauses (1) and (2);
(4) the charges, individually itemized, which are paid or to be paid by such person in
connection with the transaction but which are not incident to the extension of credit;
(5) the total amount to be financed;
(6) the finance charge expressed in terms of pesos and centavos; and
(7) the percentage that the finance bears to the total amount to be financed expressed as a
simple annual rate on the outstanding unpaid balance of the obligation.

When and how should these information be furnished to the debtor or borrower?

The information enumerated above must be disclosed to the debtor or borrower prior to the
consummation of the transaction. The information must be clearly stated in writing.

What is the effect on the obligation in case of violations to the Truth in Lending Act?

The contract or transaction remains valid or enforceable, subject to the penalties discussed
below.

What are the penalties in case of violation?

1. Any creditor who violates the law is liable in the amount of P100 or in an amount equal to
twice the finance charged required by such creditor in connection with such transaction,
whichever is the greater, except that such liability shall not exceed P2,000 on any credit
transaction. The action must be brought within one year from the date of the occurrence of
the violation.

2. The creditor is also liable for reasonable attorneys fees and court costs as determined by
the court.

3. Any person who willfully violates any provision of this law or any regulation issued
thereunder shall be fined by not less than P1,00 or more than P5,000 or imprisonment of not
less than 6 months, nor more than one year or both.

However, no punishment or penalty under this law shall apply to the Philippine Government
or any agency or any political subdivision thereof.

(Heres the full text of the Truth in Lending Act)

It will be noted that REPUBLIC ACT No. 3765, AN ACT TO REQUIRE THE DISCLOSURE OF
FINANCE CHARGES IN CONNECTION WITH EXTENSIONS OF CREDIT and otherwise
known as the TRUTH IN LENDING ACT, declares it to be the policy of the State to protect its
citizens from a lack of awareness of the true cost of credit to the user by assuring a full disclosure
of such cost with a view of preventing the uninformed use of credit to the detriment of the national
economy. (Sec. 2, RA 3765).

Under the said Act, "Credit" means any loan, mortgage, deed of trust, advance, or discount; any
conditional sales contract; any contract to sell, or sale or contract of sale of property or services,
either for present or future delivery, under which part or all of the price is payable subsequent to
the making of such sale or contract; any rental-purchase contract; any contract or arrangement
for the hire, bailment, or leasing of property; any option, demand, lien, pledge, or other claim
against, or for the delivery of, property or money; any purchase, or other acquisition of, or any
credit upon the security of, any obligation
of claim arising out of any of the foregoing; and any transaction or series of transactions having a
similar purpose or effect. (Sec. 3, Id.).

It defines "Finance charge" as interest, fees, service charges, discounts, and such other
charges incident to the extension of credit as the Board may be regulation prescribe. (Id.).

It defines "Creditor" as any person engaged in the business of extending credit (including
any person who as a regular business practice make loans or sells or rents property or services
on a time, credit, or installment basis, either as principal or as agent) who requires as an incident
to the extension of credit, the payment of a finance charge. (Id.).

Section 4 of the said Act provides that any creditor shall furnish to each person to whom credit is
extended, prior to the consummation of the transaction, a clear statement in writing setting
forth, to the extent applicable and in accordance with rules and regulations prescribed by the
Board, the following information:
(1) the cash price or delivered price of the property or service to be acquired;
(2) the amounts, if any, to be credited as down payment and/or trade-in;
(3) the difference between the amounts set forth under clauses (1) and (2);
(4) the charges, individually itemized, which are paid or to be paid by such person in connection
with the transaction but which are not incident to the extension of credit;
(5) the total amount to be financed;
(6) the finance charge expressed in terms of pesos and centavos; and
(7) the percentage that the finance bears to the total amount to be financed expressed as a
simple annual rate on the outstanding unpaid balance of the obligation.

The said clear statement in writing is commonly called the FULL DISCLOSURE STATEMENT.
Section 6 of the said Act provides any person who willfully violates any provision of this Act or
any regulation issued thereunder shall be fined by not less than P1,00 or more than P5,000 or
imprisonment for not less than 6 months, nor more than one year or both. The same
section also provides that a final judgment hereafter rendered in any criminal proceeding under
this Act to the effect that a defendant has willfully violated this Act shall be prima facie evidence
against such defendant in an action or proceeding brought by any other party against such
defendant under this Act as to all matters respecting which said judgment would be an estoppel
as between the parties thereto.

Violation of the "Truth In Lending Act", RA

3765; sample complaint-affidavit

JOINT COMPLAINT-AFFIDAVIT
 OF THE COMPLAINANTS
Xxx AND xxx
THE UNDERSIGNED COMPLAINANTS-AFFIANTS xxx and xxx, both of
legal age and residing at xxx Subdivision, xxx, xxx, xxx City, under oath,
respectfully state:

1. RESPONDENT. The Respondent in this criminal complaint is xxx, of legal

age, married, Filipino, and resident of Block xxx, Lot xxx, xxx St., xxx
Homes, xxx, xxx, xxx, where summons/subpoenas may be served by this
Honorable Office for purposes of preliminary

2. CRIME CHARGED. The herein Complainants hereby charge the abovenamed

Respondent for violation of the TRUTH IN LENDING ACT, or R.A. No. 3765.

3. ULTIMATE FACTS. On 14 December 2015, the Respondent executed

a Sworn Statement before Asst. City Pros. xxx of the Office of the City
Prosecutor of xxx City. A copy of the said sworn statement, together with the
related documents thereto (e.g., Police Referral, dated 14 December 2015;
Barangay Kasunduan, dated 7 October 2015; Final Demand Letter, dated 12
November 2015; and Special Power of Attorney, dated 14 December 2015) are
attached hereto as Annex A, with sub-markings. In the said sworn
statement, the Respondent charged the herein Complainant xxx for the alleged
crime of Estafa. It was docketed as xxx, entitled xxx. It is undergoing
preliminary investigation before Asst. City Prosecutor xxx.

3.1. In Question and Answer Nos. 4, 6, and 7 of the said Sworn Statement of the
Respondent, he perjuriously alleged the following under oath:

x x x.

O4. T Bakit mo e-reklamo (sic) yung taong iyong nabanggit? (i.e., herein
Complainant Xxx).

S - Dahil po sa hindi pag bayad sa akin ng perang hiniram nya na

nagkakahalagang PhP326,000.00.

O5. T - Kailan, saan, at anong oras naganap ang sinasabi mong

pangyayari?

S - Ganito po yun noong petsang nabanggit at nagkasundo po

kami ni XXX XXX na magnenegosyo kung saan magpapahiram po kami sa
kasamahan niyang hapon (sic) at may tubo poi to, kaya sinimulan po namin ito
sa akin po siya kumukuha ng pera at siya ang nagpapalabas, noong unang
buwan at maganda pa ang negosyo namin at bumabalik and puhunan ngunit
 dumaan na ang ilang buwan kumukuha siya ng pera sa akin ngunit hindi na ito
bumabalik kasama na ang tubo at umabot na poi to ng halagang PhP326,000.00
at noong kinausap ko na po siya ay puro kanalang PANGAKO NG PANGAKO
(sic).

X x x.

3.2. The aforecited statements of the Respondent XXX under oath were false and
perjurious. The truth of the matter is that the Estafa complaint filed by the
Respondent (as Complainant therein) against the herein Complainant XXX (as
Respondent therein) was a perjurious, malicious, felonious, baseless, unfounded
and unjust FABRICATION intended by the Respondent XXX: (a) To collect
a loan that the herein Complainants had already paid in full; and (b) To earn
unjust, huge and usuri0us interests and/or penalties/surcharges on the said fully
paid loan, without any legal and contractual basis, for the selfish financial benefit
of the Respondent SAMPAMNG and his anonymous Financier.

3.3. The truth of the matter is that: The Complainant XXX does not owe any amount
whatsoever to the Respondent XXX ; and The act of the Respondent XXX of
initiating the aforementioned Estafa case against the herein Complainant XXX,
without any legal and factual basis, has caused him to suffer mental anguish,
extreme anxieties, sleepless nights, and besmirched reputation on the part
of the herein Complainants.

3.4. The CHRONOLOGY OF RELEVANT FACTS AND EVENTS in support of this

Complaint for Perjury as discussed hereinbelow.

3.5. It appears that the Respondent and his anonymous Financier are regularly
engaged in the business of lending money to individuals/borrowers at
usurious and unconscionable interest rates. There is no showing that their
lending business is single proprietorship or a partnership or a corporation. There
is no showing that they are licensed, registered or authorized to engage in
the business of money lending.

3.6. On 20 September 2014 or thereabout, the Complainant XXX was in need

of P15, 000.00 for the tuition fees of his child enrolled at the xxx. He sought
the assistance of the Respondent. The Respondent said he could lend the herein
Complainant XXX the amount that he needed. It later appeared that the
Respondent was acting as an agent of an anonymous Financier, who
provided the Respondent with regular funds to lend out to his
clients/borrowers for a huge and usurious interest rates.

On 30 September 2014, when the herein Complainant XXX was ready to pay in
full his said P15, 000.00 loan, the Respondent demanded an additional amount
of P6, 000.00 as interest on the P15, 000.00 principal loan for the period of ten
 (10) days. The Respondent alleged that the said amount was being required
by his anonymous Financier. The herein Complainant XXX was surprised by
such a statement of the Respondent because the latter had earlier said that the
amount of P15, 000.00 was the Complainants own personal savings. The
Complainants started to suspect the honesty of the Complainant.

The P6, 000.00 interest on the P15, 000.00 principal loan for a very short period
of ten (10) days was usurious, unacceptable, unconscionable, iniquitous,
and immoral. Nonetheless, to avoid unnecessary interpersonal problems with
the Respondent, the Complainants paid, via a deposit to the bank account of
the Respondent, to the Respondent the principal loan of P15,000.00 and the
interest of P6, 000.00 that the Respondent and his anonymous Financier were
demanding.

3.7. As earlier stated, the Complainants paid the Respondent on 30 September 2014
the total amount of P21, 000.00, broken down as follows: (a) P15, 000.00 as
principal loan; and (b) P6, 000.00 as interest. Please note that the said P6,
000.00 interest amounted to an incredible, usurious, iniquitous, unconscionable
and immoral forty percent (40%) interest rate for the very short period of ten
(10) days (i.e., 20 September 2014 to 30 September 2014).

3.8. The abovementioned verbal loan transaction involving a principal amount of P15,
000.00 that took place on 20 September 2014 was not evidenced by any
promissory note, contract of loan, voucher, official receipt, or similar
financial or contractual document. It was a verbal loan transaction. There
was no oral or written stipulation whatsoever as to the interest, penalties,
or surcharges of the said verbal loan.

Please note, too, that the Respondent did not attach to his Estafa Complaint
any promissory note, contract of loan, voucher, official receipt, or similar
financial or contractual document to prove his claim against the herein
Complainants. What were attached to the Respondents Estafa Complainant
were only the following documents: (a) Barangay Kasunduan dated 7
October 2015 between the Complainant and the Respondent; (b) Final Demand
Letter, dated 12 November 2015, which was based solely on the Barangay
Kasunduan; and (c) Special Power of Attorney (SPA), dated 14 December
2015, executed by the Respondent in favor of xxx XXX (his daughter) and xxx
(his sister) on the pretext that he would be going abroad soon.

3.9. Two (2) weeks after 30 September 2014 (the date when the herein Complainants
paid to the Respondent the said amount of P21,000.00) -- or sometime in
the middle of October 2014, -- the Respondent called up the Respondent
alleging: (a) That his anonymous Financier (whom the Complainant did not
identify) had allegedly rejected the payment of P21, 000.00 earlier made by
the Respondent; and (b) That the unidentified Financier of the Complainant
was allegedly demanding double the said amount of P21, 000.00, that is, a
 total of P42, 000.00. The Respondent rejected such an unfair, unjust, iniquitous,
unconscionable, immoral, usurious, and unacceptable demand for P42, 000.00.

3.10. Please note that the Respondents demand for P42, 000.00 as of 15 October
2014 or thereabout, in relation to the original verbal loan of P15, 000.00
contracted by the herein Complainant XXX on 20 September 2014, would
amount to a huge and unjust interest of thirty-five percent (35%) for very short
period of twenty-five (25) days (i.e., 20 September 2014 to 15 October 2014).
This was clearly usurious, immoral, unacceptable, iniquitous, unconscionable,
and unjustified, considering that no interest was formally agreed upon or
stipulated when the verbal loan for P15, 000.00 was consummated between
the Complainant XXX and the Respondent on 20 September 2014.

The Respondent did not present to the herein Complainants at that time and up
to the present time any credible documentary proof identifying his anonymous
Financier. Neither did the Respondent present to the herein Complainants at
that time and up to the present time any documentary proof of
demand/collection, statement of account, billing, letter, or any written
request or instruction from his anonymous Financier to prove the allegation of
the Respondent that his anonymous Financier was indeed demanding P42,
000.00 at that time.

3.11. The Complainants at that time demanded that the Respondent the name,
address and contact details of the anonymous Financier so that the herein
Complainants could personally discuss and explain his position to the Financier.
But the Respondent refused and continues to refuse to this very day to give to
the herein Complainants the name, address and contact details of the
anonymous Financier.

3.12. After the said telephone call of the Respondent to the herein Complainant XXX
made on 15 October 2014 or thereabout, the Respondent kept quiet for two (2)
months. Then sometime in December 2014 or thereabout the Respondent
again called up the herein Complainant XXX alleging that the past-due
interest of the latter on the original principal loan of P15,000.00 made on 20
September 2014 had already escalated to P100,000.00 as of the date of his
call in December 2014. The Respondent alleged that he had mortgaged his
house to his anonymous Financier to pay for the said unpaid interest of the
herein Complainant XXX.

The herein Complainants, doubting the sincerity and truthfulness of the allegation
of the Respondent, demanded the name, address and contact details of the
Financier so that the herein Complainants could forthwith talk and discuss the
issue with the said Financier. They also demanded copies of any documentary
proof justifying the claim of P100, 000.00 interest as of that time (December
2014). But the Respondent failed and refused and continues to fail and refuse to
 this very day to provide the herein Complainants such information and
documentary proof/s.

3.13. On 7 October 2015 or thereabout the Respondent again called up the herein
Complainant XXX, saying that the former was at that time waiting inside Xxx
Subdivision near the home of the herein Complainants, inside his van, and that
the Respondent to talk with the herein Complainant XXX for a while about his
loan. The herein Complainant XXX agreed to meet with the Respondent outside
his home. When they met, the Respondent asked the herein Complainant XXX to
go inside his van for a more private discussion. When the herein Complainant
XXX the van of the Respondent, he was surprised to see a man who identified
himself as XXX XXX, who showed the Respondent a government ID. XXX
threatened the Respondent with the following words:

HOY, IKAW, LOKO KA HA! MAY UTANG KA PALA NANG GANITO KALAKI
KAY ANNIVER. HINDI MO BA AKO KILALA? VICE PRESIDENT AKO NG
ASSOCIATION NG XXX. SUMAMA KA SA AKIN SA BARANGAY. PAG HINDI
KA SUMAMA, PAPALABASIN KO KAYO SA XXX AT HINDI NA KAYO PWEDE
TUMIRA DITO.

3.14. Although the herein Complainant XXX, being a xxx national, has no perfect
mastery of the Tagalog language, he understood the context of the threatening
words of XXX based on his facial expressions and hand movements and based
on the harassing presence of the Respondent. Despite the fact that there was no
pending formal Barangay complaint against the herein Complainant XXX and
despite the fact that there was no official Barangay summons issued to him at
that time, he was forced by XXX and the Respondent to go with them to the
Barangay Hall of Barangay xxx, xxx City right that very moment.

3.15. At the Barangay Hall, the herein Complainant XXX told the Barangay officer, by
the name of Deputy R. XXX, (a) That he had not received any formal
Barangay complaint or formal Barangay summons; and (b) That the claim of the
Respondent for P366, 000.00 was baseless, unfounded, untrue, false, and
fabricated.

3.16. The herein Complainant XXX, without the aid of an interpreter,was forced by
Barangay Deputy XXX, XXX, and the Respondent to sign a page of the
Barangay logbook, which turned out later to be a KASUNDUAN.

3.17. The herein Complainant XXX was misled by Barangay Deputy XXX, XXX, and
the Respondent that the document was only a harmless record or minutes of
the Barangay meeting. The contents and the legal effects of the said
document were not explained and interpreted to the herein Complainant
XXX by Barangay Deputy XXX or any Barangay Kagawad or by the Barangay
Secretary or by any Lupon Officer or Member.
3.18. The herein Complainant XXX signed the Kasunduan UNDER DURESS. He was
MISLED by Barangay Deputy XXX to sign it. He was threatened/intimidated by
XXX and the Respondent to sign it. He did not understand its contents,
consequences, and legal effects because, as a Japanese national, he has no
mastery of English and Tagalog, although he could understand and speak some
simple English and Tagalog words and phrases. He was not assisted by an
Interpreter or by a lawyer of his choice. All he knew was that the said
document was a harmless minutes of meeting, as represented to him by
Barangay Deputy XXX, XXX and the Respondent.

3.19. Later, in his criminal complaint for Estafa against the herein Complainant XXX,
the Respondent would capitalize on the said KASUNDUAN as the sole basis of
his FINAL DEMAND LETTER to prove the alleged financial liability of the
Respondent. The Kasunduan was an entrapment document used by the
Respondent to document a verbal loan agreement and to evade the degree of
evidence required by the Statutes of Frauds of the Civil Code.

3.20. Aside from the suspicious Kasunduan, the Respondent has not presented any
credible document, such as, but not necessarily limited to, a CONTRACT OF
LOAN, a PROMISSORY NOTE, a VOUCHER, a STATEMENT OF ACCOUNT,
or a BILL executed or signed by the Lender and the Borrower: To prove the
financial claim of the Respondent and his anonymous Financier; To prove the
veracity of the computation/s of the usurious past-due interests of the herein
Complainant XXX; and To prove compliance by the Respondent and his
anonymous Financier with the mandatory provisions of the TRUTH IN LENDING
ACT in re: the formal issuance by the Lender to the Borrower of a FULL
DISCLOSURE STATEMENT, containing the amount of the principal loan,
the stipulated interest rate, the stimulated penalties and surcharges, if any
and other covenants related to the agreed loan.

3.21. After a few days from 7 October 2015, the Respondent made a series of calls to
the herein Complainant XXX, pestering the latter to pay his alleged obligation.
The Respondent alleged and stated: That the payment should be made by the
herein Complainant AXXX at the home of XXX, xxx of the homeowners
association of Xxx Subdivision (who was not a party to the oral loan
transaction); That the Respondent would soon leave for abroad; That his wife
would soon return from abroad; and That it would be a great problem on his part
if his wife would discover that he had allegedly mortgaged his house (and,
this time, allegedly including his van) to his anonymous Financier to secure
the alleged obligation of the herein Complainant XXX.

3.22. Sometime in the latter part of October 2015 or thereabout the Respondent
visited the home of the herein Complainants, accompanied by an unidentified
man whose appearance appeared to be suspicious. The Respondent repeated
his demand to be paid, this time, in the total amount of P366, 000.00. The
herein Complainants insisted that they had already settled in full his original
 verbal loan of P15, 000.00 with P6, 000.00 interest. They demanded that the
Respondent show proofs of the alleged liability of the herein Complainant XXX
and the computations of the alleged past-due interests, either in the form of
a voucher or an official receipt or a statement of account or a billing or a
promissory note or a contract of loan or any other credible
document. Ignoring the foregoing demand of the herein Complainants, the
Respondent insisted that the herein Complainants pay the total amount he was
claiming and that the same be paid by them at the home of XXX. The
Complainants were thus constrained to tell the Respondent that it would be
better for him to file a court case to prove his claim so that the truth would come
out.

3.23. Please note that in the Barangay KASUNDUAN, dated 7 October 2015, the
alleged financial obligation of the herein Complainant XXX, according to the
Respondent, was P366, 000.00. It contradicts the Final Demand Letter, dated
12 November 2015, of the Respondent, which claimed the total amount of P326,
000.00 - or a huge and unexplained difference of P40, 000.00.

3.24. On 26 November 2015 the herein Complainant XXX confronted XXX at his home
in Xxx Subdivision. She brought along with her, as her mediators/witnesses, the
Spouses XXX. Alex Xxx was a past president of the homeowners association of
the subdivision. During the said confrontation, the Respondent was mysteriously
present inside the home of XXX. In that confrontation, herein Complainant XXX
told XXX: That the herein Complainants have been residents/tenants of the
subdivision for seven (7) years; That as the vice president of the homeowners
association with the legal duty to serve the common good of the
homeowners/tenants of the subdivision, XXX should have taken steps to protect
the herein Complainants as residents/tenants of the subdivision (i.e., as
his constituents in the subdivision) against the baseless and unfounded claim of
the Respondent; That at the very least XXX should have first consulted and
heard the side of the herein Complainants when the Respondent first sought his
assistance to collect from the herein Complainant XXX; and that he should not
have believed outright, hook line and sinker, the said claim of the
Respondent without first giving the herein Complainants an opportunity to be
heard; That the act of XXX of coercively bringing the herein Complainant XXX to
the Barangay Hall on 7 October 2015, without the assistance of the herein
Complainant XXX and based solely on the personal request of the Respondent --
and without the prior filing a formal Barangay complaint and without the prior
issuance of a formal Barangay summons to the herein Complainant XXX -- was
an unjust, unfair, improper, irregular, anomalous and illegal act of harassment,
intimidation, and unjust vexation.

3.25. To put an end to abusive and pestering collection behavior of the Respondent --
and solely to buy peace, without admitting any liability on the part of the herein
Complainants and without admitting the validity of the claim of the Respondent in
 the amount of P366, 000.00 -- the herein Complainants paid the Respondent
an additional amount of P47, 000.00 on October 15, 2015, via a deposit to the
bank account of the Respondent, hoping that such an amount would finally end
the baseless claim and collection pestering/harassment of the Respondent. But it
was not so. The Respondent continues to insist on his claim of P366, 000.00 by
filing a harassment case for Estafa.

3.26. The Respondent is using the Criminal Justice System as his own coercive
COLLECTION AGENCY. It is the hope and prayer of the herein Complainants
that this Honorable Office would resist the malicious move of the Complainant
to use, mislead, and exploit it as his pro bono personal COLLECTION
AGENCY.

3.27. On 26 November 2015, the herein Complainant XXX filed a complaint with
Barangay xxx against the Complainant and XXX. During the Barangay
conciliation XXX apologized to her for his behavior. The herein affiant accepted
his apology, with the hope that XXX would be more discerning as a community
leader in the future.

3.28. On January 18, 2016 at 7:00 PM, the Subpoena of this Honorable Office in re: the
Estafa case filed by the Respondent was delivered by the process server of this
Honorable Office at the new home address of the Respondent at Xxx
Subdivision. (It was originally addressed to the old home address of the herein
Complainants in the same subdivision).

The herein Complainants were constrained to retain the legal services of

the LASERNA CUEVA-MERCADER LAW OFFICES, Xxx City, to defend their
legal and constitutional rights in the litigation of the instant case, in the interest of
truth and justice; to disprove the false, fabricated, baseless, unfounded, and
malicious claim of the Complainant; and to file the necessary criminal and/or civil
counter-charges against the Respondent.

4. CONTRADICTIONS AND INCONSISTENCIES IN THE DOCUMENTS OF THE

RESPONDENT. - Please note the internal contradictions and
inadequacies among the documents submitted by the Respondent in the Estafa
case.

AS TO THE AMOUNT OF THE ALLEGED CLAIM:

(a) In his Sworn Statement, dated 14 December 2015, given before the Xxx City
Police Station, the Respondent claims P326,000.00;

(b) In the Barangay Kasunduan, 7 October 2015, he claims P366,000.00;

(c) In the Final Demand Letter, dated 12 November 2015, he
claims P326,000.00;

(d) In the Special Power of Attorney (SPA), dated 14 December 2015, he

claims P326,000.00;

(e) Please note that in all of the foregoing allegations no VOUCHERS, OFFICIAL
RECEIPTS, STATEMENTS OF ACCOUINTS, BILLS, PROMISSORY NOTES,
CONTRACTS OF LOAN, and/or DISCLOSURE STATEMENTS were presented
by the Respondent to prove his claim.

AS TO THE PURPOSE OF THE ALLEGED LOAN OF THE HEREIN

COMPLAINANT XXX.

(a) In his Sworn Statement, dated 14 December 2015, given before the Xxx Xxx
City Police Station, the Respondent alleged that he and the Complainant
XXX had agreed to go into the business of money lending. (Q and A No. 6).

(b) In his Special Power of Attorney (SPA), dated 14 December 2015, he alleged
that his claim was based on alleged Ticket Purchase. (Par. 1, SPA).

(c) Please note that the Respondent has not presented any proof of his
alleged partnership agreement or business agreement with the herein
Complainant XXX to establish a money lending business referred to in Q and A
No. 6 of his Sworn Statement, dated 14 December 2015,
e.g., AGREEMENT/CONTRACT, MEMORANDUM OF UNDERSTANDING,
ARTICLES OF PARTNERSHIP, AFFIDAVIT, UNDERTAKING, DEED,
LETTERS AND OTHER COMMUNICATIONS, and the like.

(d) Please note, too, that the Respondent has not presented any proof of the
alleged Ticket Purchase of the herein Complainant XXX, referred to in Par. 1
of his SPA, dated 14 December 2015, e.g., VOUCHERS, PLANE TICKETS,
BILLS, STATEMENTS OF ACCOUNT, UNDERTAKINGS, DEEDS, LETTERS
AND OTHER COMMUNICATIONS, and the like.

5. The herein Complainants hereby submit to this Honorable Office the following
documents to support their instant complaint for Perjury:

(a) Annex B - XXX Cash Deposit Slip #xxx, dated 30 September 2014, in the
amount of P21, 000.00 paid to the bank account of the Respondent - to prove
the full payment by the Complainant of the oral loan dated 20 September 2014,
broken down as follows: The agreed principal loan of P15, 000.00; and
The unstipulated interest of P6, 000.oo demanded by the Respondent.
(b) Annex C and C-1 Barangay Blotter, dated 26 November 2015, re: the
Barangay complaint of the herein Complainant XXX against the unjust and
coercive acts of harassment of the Respondent and XXX XXX.

Note:

Due to lack of material time, the herein Complainants cannot submit as an annex
of this pleading at this time a copy of the XXX Cash Deposit Slip, dated 15
October 2015, in the amount of P47, 000.00 to prove that the herein
Complainants had deposited the said amount to the bank account of the
Respondent to buy peace, without admitting any liability on the part of the
herein Complainant XXX and without admitting the validity of the claim of
the Respondent. The herein Complainants will attempt this
week to secure from the Bank a formal Certification of its Branch Manager to
corroborate the foregoing fact. The herein Complainants reserve the right to
present the said bank certification as an annex to their future Reply-Affidavit.
The said Cash Deposit Slip was misplaced or
thrown away by the housemaid of the herein Complainants, together with other
personal papers, when their family recently moved to their new home
address in the same subdivision. The housemaid mistakenly thought that
those papers were trash and unnecessary.

At any rate, please note that the Complaint admits in Q and A No. 7 of his
Sworn Statement, dated 14 December 2015, that he indeed RECEIVED from
the Respondent the said amount of P47,000.00.

6. The herein Complainant XXX has REVOKED the dubious, unfair, invalid, and
misleading BARANGAY KASUNDUAN, dated 7 October 2015 (written in
Tagalog, which is not the mother language of the Complainant xxx), the reason
being that he was forced to sign the same UNDER DURESS, UNDER THE
MISLEADING AND FALSE REPRESENTATION of Barangay Deputy Xxx, in
cahoots with XXX and the Respondent, that the document was merely
a harmless record/minutes of the their Barangay meeting, and WITHOUT A
FULL, INTELLIGENT, AND VOLUNTARY KNOWLEDGE, CONSENT AND
UNDERSTANDING OF THE LEGAL EFFECTS AND CONSEQUENCES
THEREOF on his part.

7. It will be noted that REPUBLIC ACT No. 3765, AN ACT TO REQUIRE THE
DISCLOSURE OF FINANCE CHARGES IN CONNECTION WITH
EXTENSIONS OF CREDIT and otherwise known as the TRUTH IN LENDING
ACT, declares it to be the policy of the State to protect its citizens from a lack
of awareness of the true cost of credit to the user by assuring a full disclosure of
such cost with a view of preventing the uninformed use of credit to the detriment
of the national economy. (Sec. 2, RA 3765).
Under the said Act, "Credit" means any loan, mortgage, deed of trust, advance,
or discount; any conditional sales contract; any contract to sell, or sale or
contract of sale of property or services, either for present or future delivery, under
which part or all of the price is payable subsequent to the making of such sale or
contract; any rental-purchase contract; any contract or arrangement for the hire,
bailment, or leasing of property; any option, demand, lien, pledge, or other claim
against, or for the delivery of, property or money; any purchase, or other
acquisition of, or any credit upon the security of, any obligation
of claim arising out of any of the foregoing; and any transaction or series of
transactions having a similar purpose or effect. (Sec. 3, Id.).

It defines "Finance charge" as interest, fees, service charges, discounts, and

such other charges incident to the extension of credit as the Board may be
regulation prescribe. (Id.).

It defines "Creditor" as any person engaged in the business of extending

credit (including any person who as a regular business practice make loans or
sells or rents property or services on a time, credit, or installment basis, either as
principal or as agent) who requires as an incident to the extension of credit, the
payment of a finance charge. (Id.).

Section 4 of the said Act provides that any creditor shall furnish to each person
to whom credit is extended, prior to the consummation of the transaction, a clear
statement in writing setting forth, to the extent applicable and in accordance
with rules and regulations prescribed by the Board, the following information:
(1) the cash price or delivered price of the property or service to be acquired;
(2) the amounts, if any, to be credited as down payment and/or trade-in;
(3) the difference between the amounts set forth under clauses (1) and (2);
(4) the charges, individually itemized, which are paid or to be paid by such
person in connection with the transaction but which are not incident to the
extension of credit;
(5) the total amount to be financed;
(6) the finance charge expressed in terms of pesos and centavos; and
(7) the percentage that the finance bears to the total amount to be financed
expressed as a simple annual rate on the outstanding unpaid balance of the
obligation.

The said clear statement in writing is commonly called the FULL DISCLOSURE
STATEMENT.
Section 6 of the said Act provides any person who willfully violates any provision
of this Act or any regulation issued thereunder shall be fined by not less than
P1,00 or more than P5,000 or imprisonment for not less than 6 months, nor
more than one year or both. The same section also provides that a final
judgment hereafter rendered in any criminal proceeding under this Act to the
effect that a defendant has willfully violated this Act shall be prima facie evidence
against such defendant in an action or proceeding brought by any other party
against such defendant under this Act as to all matters respecting which said
judgment would be an estoppel as between the parties thereto.

WHEREFORE, it is respectfully prayed that the Respondent be indicted for

violation of the TRUTH IN LENDING ACT (R.A. 3765).

FURTHER, the herein Complainants pray for such and other reliefs as may
be deemed just and equitable in the premises.

Xxx Xxx City, 27 January 2016.

XXX XXX
Complainant
xxx St.
Xxx Homes , xxx
Xxx, Xxx City

XXX XXX
Complainant
No. xxx St.
Xxx Homes , xxx
xxx, Xxx City

SUBSCRIBED and sworn to before me in Xxx Xxx City on ___ January

2016.

Administering Assistant City Prosecutor

PURPOSES OF THE LAW

1. To protect the debtor from the effects of misrepresentation and concealment;
2. To permit him to fully appreciate and evaluate the real cost of his borrowing; and
3. To avoid circumvention of usury laws.

The Truth in Lending Act (R.A. No. 3765), was enacted primarily to protect its citizens from a
lack of awareness of the true cost of credit to the user by using a full disclosure of such cost
with a view of preventing the uninformed use of credit to the detriment of the national
economy. (Sec. 2, R.A. No.
3765).

DUTIES OF THE CREDITOR UNDER THIS ACT

Under this Act, any person extending credit must give the debtor, in writing, a recital of:
1. Cash price,
2. Amount credited if on installment price,
3. The difference between the cash and installment price,
4. Recital of the finance charges and what these charges bear to the amount to be financed in
percentage.

INFORMATION REQUIRED TO BE STATED [Sec. 4, RA 3765]

Any creditor shall furnish to each person to whom credit is extended, prior to the
consummation of the transaction, a clear statement in writing setting forth the following:

1. The cash price or delivered price of the property or service to be acquired. Meaning of cash
price or delivered price:
in case of trade transactions, it is the amount of money which would constitute full payment
upon delivery of the property or service purchased at the creditors
place of business
in financial transactions, it is the amount of money received by the debtor upon
consummation of the credit transaction, net of finance charges collected at the
time the credit is extended, if any

2. The amounts, if any, to be credited as down payment and/or trade-in. DOWN PAYMENT
amount paid by the debtor at the time of the transaction in partial payment for the property
or service purchased TRADE-IN value of an asset, agreed upon by the creditor and debtor,
given at the time of the transaction in partial payment for the property or service purchased

3. The charges, individually itemized, which are paid or to be paid by such person in
connection with the transaction but which are not incident to the extension of credit.
Meaning of non-finance charges:
amounts advanced by the creditor for items normally associated with the ownership of the
property or of the availment of the service purchased which are not incident to the extension
of credit.
in the case of the purchase of an automobile on credit, the creditor may advance the
insurance premium as well as the registration fee for the account of the debtor

4. The total amount to be financed.

Meaning of amount financed:
consists of the cash price plus nonfinance charge less the amount of the down payment and
value of the trade-in

5. The finance charge expressed in terms of pesos and centavos.

Meaning of finance charge:
includes interest, fees, collection charges, discounts, and such other charges incident to the
extension of credit as the Board may by regulation prescribe
represents the amount to be paid by the debtor incident to the extension of credit
such as interest or discounts, collection fees, credit investigation fees, attorney's
fees, and other service charges
the total finance charge represents the difference between (1) the aggregate
consideration (down payment plus installments) on the part of the debtor, and (2) the sum of
the cash price and non-finance charges

6. The percentage that the finance bears to the total amount to be financed expressed
as a simple annual rate on the outstanding unpaid balance of the obligation.

Updated BSP Rules Implementing the Truth

in Lending Act
Posted on August 3, 2011 by Imelda A. Manguiat Posted in Commercial Law, Philippines - Regulation
Tagged interest, loan
The Monetary Board issued Circular No. 730, Series of 2011 on July 20, 2011 entitled Updated
Rules Implementing the Truth in Lending Act to Enhance Loan Transaction Transparency. These
Updated Rules shall take effect on July 1, 2012.

The Truth in Lending Act was a law passed in 1963 to promote awareness by the public of the true
cost of credit. It requires a creditor to furnish the debtor prior to the consummation of the transaction
a clear statement showing, among others, the total amount to be financed, the finance charges, and the
percentage that the finance charges bear to the total amount to be financed expressed as a simple
annual rate. A person who willfully violates the provisions of the Act may be fined or imprisoned, or
both. Violation of the Act, however, will not affect the validity of the credit transaction.

The Act gave the Monetary Board the power to promulgate rules and regulations to carry out its
provisions. Pursuant to that rulemaking power, the Monetary Board mandated under the Updated
Rules that banks may only charge interest based on the outstanding balance of a loan at the beginning
of an interest period. For a loan where the principal is payable in installments, interest per installment
period shall be calculated based on the outstanding balance of the loan at the beginning of each
installment period. All loan-related documents and marketing materials shall show repayment
schedules in a manner consistent with these guidelines.

The Updated Rules also clarified the definition of finance charge as including interest, fees, service
charges, discounts and such other charges incident to the extension of credit. On the other hand,
simple annual rate has been defined as the uniform percentage which represents the ratio between the
finance charge and the amount to be financed under the assumption that the loan is payable in one
year with single payment upon maturity and there are no upfront deductions to principal. If the loan
has terms different from these assumptions, the effective annual interest shall be calculated and
disclosed to the borrower as the true cost of the loan. The total amount to be financed, the finance
charges, expressed in terms of pesos and centavos, the net proceeds of the loan, and the percentage
that the finance charge bears to the total amount to be financed expressed as a simple annual rate or an
effective annual interest rate shall be disclosed to the borrower in a disclosure statement prior to the
consummation of the transaction.

Banks are required to post in conspicuous places in their premises the information as contained in the
revised format of disclosure statement and the posters shall include an explicit notice that the
disclosure statement is a required attachment to the loan contract and that the customer has a right to
demand a copy of such disclosure.

The revised format of disclosure statement is specifically targeted towards small business, retail and
consumer loans, the borrowers of which, historically, are almost always the victims of lack of
information or misinformation regarding the true cost of credit.

https://lexoterica.wordpress.com/2011/08/03/updated-bsp-rules-implementing-
the-truth-in-lending-act/

Truth and Transparency in Lending

Enhanced Implementation of the Truth in Lending Act (Republic Act 3765)

The State protects its citizen from a lack of awareness of the true cost of credit to the customer by assuring
a full disclosure of such cost and other terms and conditions with a view of preventing the uninformed use
of credit.

As such, a disclosure statement is a required attachment to the loan contract. It shall include, at a
minimum, the following information:

1.) Total amount to be financed

2.) Finance Charges and all other charges incident to the loan
3.) Net proceeds of the loan
4.) Schedule of Payments
5.) The percentage that the finance charge bears to the total amount to be financed expressed as an
Effective Interest Rate (EIR)

Important Notice: The borrower has a right to demand a copy of the disclosure statement.

BSP Circular No. 730 (20 July 2011); effective 01 July 2012
SEC Memorandum Circular 07 (September 2011)
IC Circular Letter No. 31-2011 (5 October 2011)
CDA Memo Circular No. 2012-05 (14 March 2012)
BSP Circular Nos. 754 (17 April 2012) and 755 (20 April 2012)
BSP Memorandum Nos. M2011-040 (28 July 2011), M2012-018 (19 April 2012), M2012-020 (25 April
2012) and M2012-030 (03 July 2012)

Interest charged on outstanding balance at the start of each interest period Disclosure of ALL charges
incident to the loan Effective Interest Rate (EIR) in all loan documents