SEC advances crackdown on illegal online lending
BUTUAN CITY -- The Securities and Exchange Commission (SEC) is moving forward its crackdown on unauthorized and abusive online lending activities, starting this year’s campaign with several individuals operating unregistered online lending applications.
In a joint operation on February 12, the combined forces of the SEC Enforcement
and Investor Protection Department (EIPD) and the Philippine National Police
Anti-Cybercrime Group (PNP-ACG) successfully implemented a warrant to search,
seize and examine computer data in Cashtrees Lending Corporation’s office in
Pasig City.
The Manila Regional Trial Court Branch 46 issued the search warrant against
Cashtrees Lending for misuse of device penalized under Section 4(a)(5)(i)(ii)
of Republic Act No. 10275, or the Cybercrime Prevention Act of 2012, in
operating unregistered online lending applications in violation of Republic Act
No. 9474, or the Lending Company Regulation Act (LCRA).
The onsite digital forensic examination on the seized devices showed that the
employees of Cashtrees Lending operated online lending applications such as
Happylend, Rush Loan, Easy Money, Good Pocket, Dummy Loan, Lucky Star, Swipe
Cash, 365 Cash, Home Peso, Mega Loan, Treecash and Goldpeso.
Cashtrees Lending is registered as a corporation and holds a certificate of
authority to operate as a lending company. It operates registered online
lending platforms such as Happylend, Creditcash and Cashmore.
However, the majority of the online lending applications operated by Cashtrees
Lending were unregistered. These include Goodpocket, Easymoney, 365 Cash and
Rushloan, which have been the subject of cease and desist orders issued by the
Commission.
Following the digital forensic examination, the PNP-ACG arrested 46 employees,
including the manager of Cashtrees Lending for violating the Cybercrime
Prevention Act of 2012 and the LCRA.
On February 13, the SEC-EIPD and PNP-ACG filed with the Department of Justice
an inquest complaint against the arrested employees of Cashtrees Lending for
violating Section 4(a)(5)(i)(ii) of the Cybercrime Prevention Act of 2012 and
the LCRA in relation to Section 6 of the Cybercrime Prevention Act of 2012.
The SEC has been receiving numerous complaints against online lending
applications (OLAs) for various violations of the LCRA and for abusive debt
collection practices in violation of SEC Memorandum Circular No. 18, Series of
2019, which provides for the Prohibition on Unfair Debt Collection Practices of
Financing Companies and Lending Companies.
In response, the Commission created a task force to handle complaints involving
online lending operators and to take the appropriate measures to stop lending
companies and their operators from engaging in abusive practices and
activities.
The task force closely coordinates with other law enforcement agencies such as
the PNP-ACG and the National Bureau of Investigation to crack down on illegal
online lending applications.
The SEC regularly monitors lending and financing companies for their compliance
with applicable laws, rules and regulations, as it seeks to protect borrowers
from abusive, unethical, and illegal lenders.
To date, the Commission has canceled the licenses of 36 financing/lending
companies due to various violations of applicable rules and regulations.
It has also revoked the certificate of registration of a total of 2,081 lending
companies for their failure to secure the requisite certificate of
authority, pursuant to the LCRA.
In total, 72 online lending applications have been ordered to cease operations
for lack of authority to operate as a lending or financing company.
In addition, the SEC has secured the convictions of 74 individuals for
violation of the LCRA.
To see the list of licensed lending and financing companies and their
registration status, please visit the Lending and Financing Companies corner on
the SEC website at https://www.sec.gov.ph/
