11 more lending apps shut down

MANILA, Philippines — Cash Whale, Cash 100 and Peso2Go are among the 11 illegal mobile lending applications that the Securities and Exchange Commission (SEC) has ordered to stop lending after heeding complaints about unreasonable and abusive collection practices.

The order dated Sept. 20 also covers Cashafin, CashFlyer, CashMaya, Cashope, Cashwarm, Cashwow, Creditpeso, and ET Easy Loan.

Previously, the SEC had issued a cease-and-desist order against 19 other online lending applications.

The SEC Enforcement and Investor Protection Department (EIPD) investigated the lending activities of entities behind the 11 apps after receiving complaints from borrowers about collection practices that subjected them to public humiliation and ridicule.

The borrowers also complained of high interest rates, unreasonable terms and conditions, misrepresentations on noncollection of charges and fees and violation of their right to privacy.

The unlicensed entities were ordered to stop engaging in, promoting and facilitating unauthorized lending activities.

The SEC also ordered them to stop 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.

Furthermore, the SEC directed persons and entities carrying out, abetting or promoting lending or similar activities without license to immediately stop engaging in lending until they have incorporated and obtained the certificate of authority to operate.

The 19 previously ordered to stop online lending applications are 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.

Section 4 of Republic Act No. 9474, or the Lending Company Regulation Act of 2007, requires that a lending entity be established only as a corporation.

It further provides that “no lending company shall conduct business unless granted an authority to operate by the SEC.”

Violators may face a fine ranging from P10,000 to P50,000 or imprisonment of six months to 10 years or both, under Section 12 of the Lending Company Regulation Act.

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

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 rude, high pressure methods of collection, misrepresentations, and unreasonable terms and conditions imposed by said online lending operators and their agents and representatives exemplify such practices that as a matter of policy, the state seeks to prevent,” the SEC said in its order.