SEC orders closure of 4 illegal online lending apps
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The Securities and Exchange Commission (SEC) has directed four online lending platforms to stop offering loans to the public, citing lack of license, failure to disclose pertinent information and abusive practices.
The SEC issued the cease and desist on April 14 to CashAB, CashOcean, KwikPeso and Little Cash, together with their owners, CashAB Lending Co., Mimosa Credit Ltd. and Zamoya Credit Ltd.
The online lending operators, their agents, representatives and promoters, as well as the owners of their hosting sites and all persons acting for and on their behalf, were directed to immediately stop engaging in, promoting and facilitating lending activities.
The SEC further ordered the online lending operators to cease from offering and advertising their lending business through the internet and to delete or remove their promotional presentations and offerings, including their lending apps.
CashAB, CashOcean, KwikPeso and Little Cash have offered and provided loans to the public without a validly subsisting certificate of incorporation and certificate of authority to operate as a lending or financing company from the SEC.
The SEC likewise noted the online lending operators’ abusive collection practices, which constituted unfair debt collection practices expressly prohibited under SEC Memorandum Circular No. 18, Series of 2019.
The online lending operators gain access to personal information stored in borrowers’ mobile phones, including social media accounts, contact numbers and email addresses, through their mobile applications.
The online lending operators then use 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 supposed refusal to pay the amount due. In other cases, the borrower would be threatened with legal action or public shaming.
