SEC bans online lending platforms for abusive behavior
Due to unfair debt collection practices, including shaming on social media and issuing death threats, the Securities and Exchange Commission (SEC) has shut down online lending platforms Pondo Loan, Start Loan, Green Loan and Loan Club.
The SEC has revoked the certificate of authority (CA) of KingABC Lending Corp., which runs these four online lending platforms, in an order dated June 7.The SEC Corporate Governance and Finance Department (CGFD) found KingABC to have committed 15 violations of SEC memorandum circular No. 18, series of 2019 (SEC MC No. 18), which prohibits unfair debt collection practices.
Corporate regulators found KingABC to have threatened borrowers by shaming them on social media, publishing their names as scammers and contacting people in the borrowers’ contact list despite these people not being named as comakers or guarantors.
KingABC also used obscenities, insults or profane language and threatened to sue borrowers based on made-up legal bases, according to the CGFD.
KingABC was already penalized previously for violating SEC MC No. 18 twice. A third violation triggers either a monetary fine, suspension or revocation of the company’s CA, depending on the facts, circumstances and gravity of the case.
“It is likewise clear that at this point, the revocation of respondent’s CA is not merely appropriate, but rather necessitated by the gravity and number of its offenses,” the CGFD said.
Aside from the 15 violations, KingABC is facing 53 more complaints.
“Even more telling is the fact that subsequent to the issuance of the formal charge, the abusive collection practices of the respondent only became worse and more hostile based on the evidence submitted by the complainants.
The department noted messages filled with death threats, profanities and other obnoxious and reprehensible language,” the SEC said.
