The SEC has ordered three unlawful lenders to stop operating.
MANILA, Philippines — The Securities and Exchange Commission (SEC) has ordered three online lending companies to cease lending activities without first obtaining the requisite Commission approval, as well as to cease using abusive collection techniques.
Golden Cash, Help Cash, and Grace Cash were ordered by the commission en banc on April 26 to cease and desist from engaging in, carrying out, promoting, or facilitating any loan activity/transaction until they obtained the requisite registration and license from the commission.
Online lending businesses’ owners, operators, promoters, representatives, and agents were also told to stop engaging in abusive debt collection methods, as described by SEC Memorandum Circular No. 18, Series of 2019. (MC 18).
The commission also ordered the online lending companies to stop offering and advertising their loan services on the internet or through any other medium, as well as to delete any information related to it.
The injunction was issued after the SEC discovered that Golden Cash, Help Cash, and Grace Cash were not registered as corporations with the agency. As a result, they are unable to get a certificate of authorisation to function as a lending or finance firm.
The Lending Company Regulation Act of 2007 (LCRA), or Republic Act No. 9474, requires persons or entities functioning as lending firms to register as corporations and get from the Securities and Exchange Commission (SEC) the requisite authority to operate.
“The Commission finds that Golden Cash, Help Cash, and Grace Cash’s continued operations constitute a clear violation of, and should be penalized pursuant to, the (LCRA) because it engages in or carries out a lending business without the required license from the commission,” the commission en banc concluded.
The SEC Enforcement and Investor Protection Department (EIPD) discovered that online loan companies were using unfair collection techniques, which are illegal under MC 18.
According to the EIPD, online loan companies have harassed, threatened, and publicly humiliated their individual borrowers, as well as imposing hidden costs and unnecessary processing expenses.
“The acts of these unregistered online lending operators in illegally offering and providing loans to the public, charging high interest rates, and subjecting its debtors to unfair treatment through abusive and even libelous language in collecting the loaned amount…have no place in a society governed by and faithfully adheres to positive laws,” said the SEC en banc.
Visit the SEC’s lending and financing companies area at https://www.sec.gov.ph/lending-companies-and-financing-companies-2/lending-companies-and-financing-companies/ to see a list of licensed lending and financing companies and their registration status.
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