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 are on the chopping block.
“There are another eight that is on our radar. I anticipate the cease and desist order coming out next week perhaps,” Lee said.
He added that the SEC is also investigating 64 more online lending platforms.
“Not all of them are illegal, there are a certain number that is legitimate. But there are some that bear 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 violated the Lending Company Regulation Act of 2007. The law requires these companies to register as a corporation with the SEC, and get certificates of authority to operate.
The commission has received complaints against high interest rates, unreasonable terms and conditions, misrepresentations, violations of right to privacy, harassment, and other collection purposes.
The National Privacy Commission (NPC) has received around 1,000 complaints of harassment and privacy breach from borrowers who used online lending apps.
Metro Manila Police chief Maj. Gen. Guillermo Eleazar on Thursday led the raid on Fuwei Lending Corporation in Pasig City. He said that they will file cases of violation of the Data Privacy Act of 2012 against its five Chinese owners and 49 employees.
“Ang gusto nating mangyari dito matigil na ang ginagawang panloloko at pananakot sa ating kababayan na nagreresulta sa kanilang kahihiyan at the same time violation ng kanilang privacy in accordance to the 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?
The SEC, on September 20, issued memorandum circular 19. This would give financing and lending companies up to October 5 to comply with the requirement of publishing their compliance with SEC regulations on their website in a manner that can easily be accessed by the public.
“All financing and lending companies are supposed to register all their online platforms as trade names with the SEC. They’re also required to submit an affidavit of compliance in regard to their existing online platforms to one of our departments essentially telling us the name of the online platform, the proof of compliance in relation to our memorandum circular,” Lee said.
The circular would also require companies to disclose their corporate name, SEC registration number and certificate of authority to operate a financing or lending company.
Aside from checking for these requirements, Lee advised potential borrowers to do due diligence. A list of registered financing and lending companies can be accessed on the SEC website.
“We are encouraging responsible borrowing. Borrowers are encouraged to look and do their due diligence,” Lee said.
Complaints against illegal or shady lending practices can be filed with the SEC, while complaints against data privacy breache can be filed with the NPC.
“By law the SEC is the primary regulator of lending and financing companies,” the commissioner said.
SEC memorandum circular 18, issued on August 20, penalizes unfair collection practices such as use of threats, obscenities and insults, publication of personal information of borrowers who allegedly refuse to pay debts, false representation, 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 authority to operate revoked.
“With this memorandum circular we’ve expanded our reach, expanded our scope, in an effort to disallow all these abuses,” said Lee.
The SEC is also eyeing a financial literacy program on online lending.