Close  

SEC shuts down 12 more online lenders

/ 04:06 AM October 15, 2019

The Securities and Exchange Commission (SEC) is continuing its crackdown on illegal online lenders, with a dozen more of these entities ordered to shutdown their operations.

In an order dated Oct. 10, the SEC en banc issued a cease-and-desist order against A&V Lending Mobile, A&V Lending Investor, A.V. Lending Corp., Cashaku, Cashaso, CashEnergy, Happy Loan, Peso Pagasa, Vito Lending Corp., Phily Kredit, Rainbow-Cash and Rainbowcash.Ph Lending Corp.

ADVERTISEMENT

These companies have engaged in lending activities without the necessary licenses, the SEC said in a statement on Monday.

“Considering that online lending operators are not incorporated entities or have no certificate of authority to operate as lending companies or financing companies, the lending activities and transactions are illegal and have to be stopped immediately by this Commission,” the cease and desist order read.

FEATURED STORIES

Moreover, the SEC said the “abusive” collection practices of these unlicensed online lending companies constituted “unfair” debt collection practices which were prohibited under the recently issued SEC Memorandum Circular No. 18, Series of 2019, also known as Prohibition on Unfair Debt Collection Practices of Financing Companies and Lending Companies.

Based on the findings of the SEC Corporate Governance and Finance Department (CGFD), these online lending apps and their operators were not registered as corporations or partnerships and/or had not been issued certificates of authority to operate as lending or financing companies.

In the case of A&V Lending Mobile, the CGFD found no record of registration of its purported operator, A&V Lending Investor. A certain A.V. Lending Corp. turned up in the SEC database, but its registration had already been revoked.

Meanwhile, Peso Pagasa and Rainbow-Cash are purportedly operated by Vito Lending Corp. and Rainbowcash.Ph Lending Corp., respectively. However, no such corporations are recorded in the SEC’s database.

Investigations by the SEC Enforcement and Investor Protection Department (EIPD) showed that the online lending operators had gained access to personal information stored in borrowers’ mobile phones, including social media accounts, contact numbers and e-mail addresses, through their mobile applications. These entities then used such information to exact prompt payment. They would send a text blast to the borrower’s contacts to inform them about the borrower’s indebtedness and his/her supposed refusal to pay the amount due. In other cases, borrowers were threatened with legal action or public shaming.

A number of complainants said the abusive collection practices of the online lending operators, their agents and representatives had caused them depression and sleepless nights, ruined their reputation and adversely affected their health.

The SEC earlier issued cease-and-desist orders to a total of 30 online lending applications.

ADVERTISEMENT

Any person engaged in illegal lending would face a fine ranging from P10,000 to P50,000 or imprisonment of six months to 10 years or both, under the Lending Company Regulation Act.

Read Next
LATEST STORIES
MOST READ
Don't miss out on the latest news and information.
View comments

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Business, online lenders, SEC
For feedback, complaints, or inquiries, contact us.


© Copyright 1997-2019 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.