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SEC issues stop order vs 11 online lending apps

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THE Securities and Exchange Commission (SEC) continues its crackdown against illegal lenders with the issuance of a cease and desist order (CDO) against 11 online lending applications.

The country’s corporate regulator said Monday that it has issued a CDO against Cash Whale, Cash 100, Cashafin, CashFlyer, CashMaya, Cashope, Cashwarm, Cashwow, Creditpeso, ET Easy Loan and Peso2Go.

The commission said its Corporate Governance and Finance Department found that the aforementioned apps failed to secure the required certificates of authority that would allow them to operate as lending or financing companies.

“The continued operation of such unlicensed online lending activities is thus a continuing violation of Republic Act No. 9474 otherwise known as the Lending Company Regulation Act of 2007 which makes it punishable for any person to engage in the lending business without a permit from the SEC,” the SEC said in the CDO.

The SEC called on the agents, representatives and promoters, owners of their hosting sites, and all persons connected to the online lending apps to immediately halt operations.

They were also directed to stop offering and advertising their lending business through the internet, as well as to delete or remove all promotional presentations related to their operations.




The issuance of the CDO is in line with the Lending Company Regulation Act of 2007, which partly states that “no lending company shall conduct business unless granted an authority to operate by the SEC.”

Those found to engage in the business of lending without obtaining a license from the SEC could face a fine worth P10,000 to P50,000, or imprisonment of six months to 10 years, or both.

The CDO against the 11 lending apps follows the SEC’s issuance of an earlier order against 19 online lending apps, including Pera, QuickPera, Lendmo Philippines, Binixo, CashBus, Cashcat, Cashuttle, Crazy Loan, Flash Cash, Happy2Peso, Hatulong, MeLoan, MoneyTree Quick Loan, Pera Express, Pera4u, Peramart, PesoLending, QuickPeso and Umbrella.

The SEC Enforcement and Investor Protection Department (EIPD) found that these lending apps were enforcing unreasonable and abusive collection practices, which involved subjecting their borrowers to public humiliation and ridicule, high interest rates, unreasonable terms and conditions, and violation of their right to privacy, among others.

The EIPD said that these unauthorized lenders managed to gain access to a borrower’s contact numbers, Facebook accounts, and e-mail address through their mobile phones.

“The rude, high pressure methods of collection, misrepresentations, and unreasonable terms and conditions imposed by said online lending operators and their agents and representatives exemplify such practices that as a matter of policy, the State seeks to prevent,” the SEC said.

The SEC has likewise revoked the certificates of registration of 2,081 lending companies to date, for failing to secure the required certificate of authority to operate as a lending or financing company. — Arra B. Francia

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