Advertisement

FCash license canceled for collection harassment

Font Size

WWW.FCASH.PH

THE Securities and Exchange Commission (SEC) has revoked the license of an operator of two online lending platforms over complaints of alleged debt collection harassment.

In a statement on Monday, the commission said it canceled the certificate of authority of FCash Global Lending, Inc., the operator of Fast Cash and Fast Cash Loan, after it was found to have made multiple breaches of SEC Memorandum Circular No. 18, which prohibits unfair debt collection practices.

Citing its Corporate Governance and Finance Department, the corporate regulator said FCash sent threatening messages to borrowers with charges for estafa, complaints before the National Bureau of Investigation, and service of writ of garnishment or writ of attachment.

It also complained of warning borrowers of reporting them to their respective employers and using “abusive words when talking to them over the phone.”

Moreover, it was noted that the lender “took advantage of borrowers’ lack of awareness of legal terminologies to compel them to pay their loans.”

Advertisement

In its defense, FCash said the SEC circular, which was issued on September 8, did not cover the transactions that were the subject of complaints.

“Respondent was bound to comply with its provisions at the time it became effective – with respect to new and existing loan accounts, insofar as the latter remain pending and demandable,” the SEC said.

The commission maintained that the firm has neither right nor obligation “to harass or employ abusive tactics in conducting its collection.”

Last year, FCash, which the SEC considers as “one of the most number of complaints for collection harassment since 2017,” received a P25,000 fine on Sept. 25 for violating the SEC circular, then another P50,000 on the following day for the same offense. It was penalized on Dec. 12 for the third time.

“While the commission fully supports the growth of lending and financing companies and recognizes the significant role they play in terms of financial inclusion and access to credit, it shall remain relentless and steadfast in its mandate to crack down abusive lending companies that prey on the desperate and vulnerable,” the SEC said.

The SEC earlier ordered the closure of four mobile lending applications — CashAB, CashOcean, KwikPeso, and Little Cash — for having a lack of authority to operate as a financing company. They were also found to have employed “abusive” collection practices. — Adam J. Ang

Advertisement
Advertisement