SEC-Cebu warns online lenders harassing borrowers


CITY OF CEBU – The Securities and Exchange Commission-Cebu Extension Office (SEC-CEO) has warned online loan operators against harassment of borrowers in debt collection.

Lawyer Alma Marie Dalena, head of SEC-Cebu, said her office had taken steps to protect the public from unfair debt collection by using harassment to corner borrowers.

“Even before the arrival of the Covid-19 (2019 coronavirus disease) pandemic in the Philippines, our office has already taken steps to protect the public from unfair debt collection which includes the use or threat of recourse to debt. violence to harm the person, their reputation or property as embodied in the SEC Memo No. 18 series of 2019, ”said Dalena.

In a message to the Philippine News Agency on Monday night, Dalena said Republic Law 11469, or Bayanihan to Heal As One and its Rules and Regulations (IRR), provides for a grace period. 30 days for all loans with principal or interest. expiring with the reinforced community quarantine (ECQ).

“Finance, loan and even micro-lending companies are hereby warned that any violation will be dealt with with all the force of the law,” said Dalena.

She said the committee noted the abusive collection practices of online loan operators, which constituted unfair debt collection practices expressly prohibited by SEC Circular No.18, 2019 series.

She said online loan operators have access to personal information stored in borrowers’ mobile phones, including social media accounts, contact numbers and email addresses through their mobile apps.

Online loan operators then use this information to demand prompt payment. They texted the borrower’s contacts to inform them of the borrower’s indebtedness and their supposed refusal to pay the amount owed.

In other cases, the borrower would be threatened with legal action or public humiliation.

“Abusive collection practices, misrepresentation and unreasonable terms and conditions imposed by online loan operators and their agents and representatives illustrate the practices that the state seeks by policy to prevent,” said a separate statement.

Dalena also cautioned the public against online loan operators who offer loans to the public even without a valid certificate of incorporation and certificate of authorization to operate as a finance company.

In a separate statement, Dalena said the SEC has ordered operators of four online lending apps to cease and desist from offering and providing loans to the public.

The cease and desist order issued by the commission en banc on April 14 covers CashAB, CashOcean, KwikPeso and Little Cash, as well as their owners, CashAB Lending Corp., Mimosa Credit Ltd. and Zamoya Credit Ltd.

The SEC has ordered online lending operators, their agents, representatives and promoters, as well as the owners of their hosting sites and anyone acting for and on their behalf to immediately cease and desist. refrain on pain of contempt from initiating, promoting and facilitating lending activities.

The statement said the commission further ordered online lending operators to cease offering and advertising their lending business on the Internet and to remove or withdraw their presentations and promotional offers, including their apps from. ready.

CashAB, CashOcean, KwikPeso and Little Cash have offered and granted loans to the public without a valid certificate of incorporation and without a certificate of authorization to operate as an SEC loan or finance company.

“Article 4 of Republic Law 9474, or the Loan Company Regulation Law 2007, requires a loan company to be incorporated only as a company. It further provides that no loan company should carry on business unless it is authorized to operate by the SEC, ”he said.

Section 12 of the law penalizes anyone who engages in lending activity without validly valid authority to operate from the SEC. He can face a fine ranging from PHP 10,000 to PHP 50,000 or imprisonment from six months to 10 years or both.

Likewise, Republic Act 5980, or the Finance Act 1998, punishes the act of engaging in the business of a finance company without the required permission of the SEC with a fine of up to minus PHP 10,000 and no more than PHP 100,000, or imprisonment for no more than six months or both, he said.

“In addition to not having the necessary licenses to operate, online loan operators have not disclosed certain information in their advertisements and online platforms, as required by the SEC Memorandum Circular No. 19, series 2019” , he added. (ANP)

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