SEC halts 11 online lending firms

MANILA, Philippines — The Securities and Exchange Commission (SEC) has intensified its crackdown on online lending with the issuance of cease and desist orders against 11 more online lending applications.

This after the SEC received numerous complaints of unreasonable and abusive lending and collection practices by these companies.

The SEC order, issued on Sept. 20, covers Cash Whale, Cash 100, Cashafin, CashFlyer, CashMaya, Cashope, Cashwarm, Cashwow, Creditpeso, ET Easy Loan and Peso2Go.

These online lending applications have been the subject of customer complaints.

The SEC urged owners and operators of the online lending applications as well as their agents to immediately cease and desist from engaging in unauthorized lending activities.

“The continued operation of such unlicensed online lending activities is thus a continuing violation of Republic Act 9474 otherwise known as the Lending Company Regulation Act of 2007 which makes it punishable for any person to engage in the lending business without a permit from the SEC,” the SEC said.

The SEC ordered online lending operators to cease from offering and advertising their lending business through the internet and to delete or remove promotional presentations and offerings of such lending business from the internet including the lending applications that they operate.

It cited Sec. 4 of RA 9474 which provides that “no lending company shall conduct business unless granted an authority to operate by the SEC.”

Based on the findings of the SEC Corporate Governance and Finance Department, these online lending applications have not secured the required certificates of authority to operate as lending or financing companies.

Users of the online lending applications complained about collection practices that subjected them to public humiliation and ridicule, high interest rates, unreasonable terms and conditions, misrepresentations as to non-collection of charges and fees, and violation of their right to privacy, among others.  

Information gathered by the SEC showed the unauthorized lenders managed to access personal information kept in a borrower’s mobile phone, such as the contact numbers, Facebook accounts and email addresses stored therein through the online lending applications.

The unauthorised lenders would then use such information to exact prompt payment.

 In many cases, the unauthorized lenders would send a text message to the borrower’s contacts to inform them about the indebtedness and the borrower’s supposed refusal to pay the amount due. In other cases, the borrower would be threatened of legal action or public shaming on social media if payment is not made.

The SEC earlier CDOs against 19 online lending applications namely Instant Pera, QuickPera, Lendmo Philippines, Binixo, CashBus, Cashcat, Cashuttle, Crazy Loan, Flash Cash, Happy2Peso, Hatulong, MeLoan, MoneyTree Quick Loan, Pera Express, Pera4u, Peramart, PesoLending, QuickPeso and Umbrella.

As part of its crackdown on illegal lending, the SEC has already revoked the certificates of registration of 2,081 lending companies to date for their failure to obtain the required certificate of authority to operate as a lending or financing company.