SEC orders 3 illegal lenders to cease operations
BUTUAN CITY -- The Securities and Exchange Commission (SEC) has ordered three online lending operators to stop conducting lending activities without the necessary authorization from the Commission and to stop employing abusive collection practices.
The owners, operators, promoters, representatives, and agents of the online lending operators were likewise directed to stop from engaging in unfair debt collection practices, as defined under SEC Memorandum Circular No. 18, Series of 2019 (MC 18).
The Commission also ordered the online lending operators to stop offering and advertising their lending business through the internet or any other media, and to delete materials involving such.
The SEC issued the order after finding that Golden Cash, Help Cash, and Grace Cash are not registered as a corporation with the Commission. As such, they cannot secure a Certificate of Authority to Operate as a Lending/Financing Company.
Republic Act No. 9474, or the Lending Company Regulation Act of 2007 (LCRA), requires persons or entities operating as lending companies to register as corporations and to secure from the SEC the necessary authority to operate.
“[T]he Commission finds that the continued operations of Golden Cash, Help Cash, and Grace Cash constitute a clear violation of, and should be penalized pursuant to the [LCRA] because it engages in or carries out a lending business without the required license from the Commission,” the Commission En Banc held.
Further, findings by the SEC Enforcement and Investor Protection Department (EIPD) revealed that the online lending operators have been employing unfair collection practices, prohibited under MC 18.
The EIPD noted that the online lending operators have been harassing, threatening, publicly humiliating their respective borrowers, and imposing hidden charges and excessive processing fees.
“The acts of these unregistered online lending operators in illegally offering and providing loans to the public, charging high interest rates, and subjecting its debtors to unfair treatment through abusive and even libelous language in collecting the loaned amount…have no place in a society that is governed by and faithfully adheres to positive laws,” the Commission En Banc said.
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/
