SEC to shut down eight more online lending apps
Metro Manila (CNN Philippines, September 27) — The Securities and Exchange Commission (SEC) will continue its crackdown on illegal online lending platforms.
In an interview on CNN Philippines Business Roundup, SEC Commissioner Kelvin Lee said more apps were on the verge of being shut down.
“There are eight more that are on our radar. I anticipate that the cease and desist order may be issued next week,” Lee said.
He added that the SEC was also investigating 64 other online lending platforms.
“Not all of them are illegal, there are a number that are legit. But there are some that deserve a second look,” Lee said.
To date, the SEC has issued cease and desist orders against the following lenders: Binixo, Cash 100, CashBus, Cashcat, Cash Whale, Cashafin, CashFlyer, CashMaya, Cashope, Cashuttle, Cashwarm, Cashwow, Crazy Loan , Creditpeso, ET Easy Loan, Flash Cash, Happy2Peso, Hatulong, Instant Pera, Lendmo Philippines, MeLoan, MoneyTree Quick Loan, Pera Express, Pera4u, Peramart, PesoLending, Peso2Go, QuickPera, QuickPeso and Umbrella.
These companies were found to have breached the Credit Companies Regulation Act 2007. The law requires these companies to register as a company with the SEC and obtain certificates of authorization to operate.
READ: SEC closes 11 more online lenders
The commission has received complaints about high interest rates, unreasonable terms and conditions, misrepresentation, privacy violations, harassment and other collection purposes.
The National Privacy Commission (NPC) has received approximately 1,000 complaints of harassment and privacy violations from borrowers who have used online loan applications.
Metro Manila Police Chief Maj. Gen. Guillermo Eleazar led the raid on Fuwei Lending Corporation in Pasig City on Thursday. It said they would file claims for breach of the Data Privacy Act of 2012 against its five Chinese owners and 49 employees.
“Ang gusto nating mangyari dito matigil ang ginagawang panloloko et pananakot sa ating kababayan nagreresulta sa kanilang kahihiyan at the same time, violation of privacy according to law,” Eleazar said.
[Translation: We want to stop them from scamming and intimidating our countrymen, which result to their shame and at the same time violating their right to privacy in accordance to the law.]
How can borrowers protect themselves?
On September 20, the SEC issued Information Circular 19. This would give finance and lending companies until October 5 to comply with the requirement to publish their compliance with SEC regulations on their website. in a manner easily accessible to the public.
“All finance and lending companies are expected to register all of their online platforms as trade names with the SEC. They are also required to submit an affidavit of compliance regarding their existing online platforms to one of our departments. basically telling us the name of the online platform, proof of compliance against our circular memorandum,” Lee said.
The circular would also require companies to disclose their corporate name, SEC registration number and certificate of authorization to operate a finance or loan company.
In addition to verifying these requirements, Lee advised potential borrowers to do their due diligence. A list of registered finance and loan companies can be found on the SEC website.
“We encourage responsible borrowing. Borrowers are encouraged to watch and do their due diligence,” Lee said.
Complaints against illegal or shady lending practices can be filed with the SEC, while complaints against breaches of data privacy can be filed with the NPC.
“By law, the SEC is the primary regulator of loan and finance companies,” the commissioner said.
SEC Circular 18, issued Aug. 20, penalizes unfair collection practices such as the use of threats, obscenities and insults, the publication of personal information of borrowers who allegedly refuse to pay their debts , misrepresentation and calling borrowers between 10 p.m. and 6 a.m. without their consent.
Violators could face fines of ₱25,000 to ₱1 million and could have their certificates of permission to operate revoked.
“With this circular memorandum, we have extended our reach, broadened our scope, in an effort to prohibit all of these abuses,” Lee said.
The SEC is also considering a financial education program on online lending.