The Securities and Exchange Commission (SEC) has issued a cease and desist orders against four online lending entities using mobile applications for operating without licenses.
The SEC Commission En Banc issued the orders on April 14 directing CashAB, CashOcean, KwikPeso, and Little Cash, along with companies allegedly behind them, for them to stop operations.
The agency ordered the enities and those involved in their operations to stop “operating, engaging in, carrying out, and/or promoting lending/financing business.”
“The Lending Company Regulation Act of 2007 was enacted to prevent and mitigate, as far as practicable, practices prejudicial to public interest,” the Commission En Banc noted in the order.
The agency found that the lending operators, using mobile applications, were not allowed to operate as they did not have the Certificate of Incorporation and Certificate of Authority to Operate as a Lending or Financing Company.
The agency added that they also failed to disclose particular details in their advertisements and online platforms as per the SEC Memorandum Circular No. 19, Series of 2019.
The Commission also found abusive collection practices, which constituted unfair debt collection practices expressly prohibited under SEC Memorandum Circular No. 18, Series of 2019.
Thed online lending operators obtained pieces of information of their borrowers through their mobile application, including their social media accounts, contact numbers and email addresses.
Borrowers used these pieces of information when borrowing and paying their loans and if they failed to pay their obligations, the same pieces of information were used against them as they were allegedly threatened with legal action or used for public shaming.
Section 4 of Republic Act No. 9474, or the Lending Company Regulation Act of 2007, lending entities company must have legal personalities and must be able to secure authorities to operate as lending companies from the SEC.
The same law states that those involved in operating illegal entities will face a fine between P10,000 to P50,000, or imprisonment of six months to 10 years or both.
Aside from that, they may also be penalized under Republic Act No. 5980, or the Financing Act of 1998 where they will be fined P10,000 to P100,000 or imprisoned for not more than six months or both.
“The abusive collection practices, misrepresentations, and unreasonable terms and conditions imposed by the online lending operators and their agents and representatives exemplify the practices that as a matter of policy, the State seeks to prevent,” the Commission En Banc said.
- Exec: Davao light spending P1.85-B in capex in 2021
- Microsoft unveils immersive education solutions to inspire educators in reimagining learning experiences
- Damosa, IWG unveil franchise partnership
- EDITORIAL | The community press today
- STATEMENT | Ending violence and ensuring jobs and rights for Filipina OFWs
- City In Photos
- HONORING MY MOTHER | Automatic writing
- Philippine Media Statement On the Anti-Terrorism Act of 2020
- Editorial Cartoon of the Day
- City In Photos