SEC, NPC step up fight vs abusive online loan collection practices
MANILA, Philippines — The Securities and Exchange Commission (SEC) on Wednesday said it has been discussing ways to further protect borrowers from abusive loan collection practices of online lending platforms (OPLs) with the National Privacy Commission (NPC).
This developed following reports of various companies and individuals facing complaints for these practices.
According to lawyer Oliver Leonardo, director of the enforcement and investor protection department of the SEC, the discussion with NPC covers the protection of borrowers from online lending apps requiring access to their list of contacts. Those in the list of contacts are bombarded with text messages about the borrowers and their loans when they are unable to pay.
“There are discussions with the NPC that would further protect the borrowers as it is in accordance with some of the complaints that we receive and the experiences in running after all of these violations,” Leonardo said in an interview with ANC.
“The mode is when downloading, you have to express concern, consent for these apps to sort of access your contact lists, and the government is addressing the situation so that only proper procedures under the law [is applied],” he added.
Leonardo also said the agency had received complaints from its stakeholders that some OPLs were unregistered, adding that it had already filed a cease and desist orders against about 74 OLPs.
He said OPLs should register with the commission under SEC Memorandum Circular (MC) No. 18 Series of 2019.
To prevent the proliferation of abusive loan schemes and to filter the credibility of these OPLs, Leonardo said concerned lending companies should provide a list of OPLs they handle in different application marketplaces, such as Google Play and Apple, in accordance with the agency’s MC.
Meanwhile, OPLs available in these application marketplaces should indicate the name of their respective principal or lending companies. If not, Leonardo said they would coordinate with these online markets to have these OPLs deactivated.
Last June 20, six companies and over 30 individuals faced complaints before the Department of Justice for violating Republic Act (RA) 9474, or the Lending Company Regulation Act, and RA 11765, or the Financial Products and Services Consumer Protection Act. Of these individuals, five are Chinese nationals.