THE Securities and Exchange Commission (SEC) has ordered the immediate shutdown of three more illegal online lenders found to be operating without licenses.
In a statement yesterday, the country’s corporate regulator said it issued a cease and desist order to Peso Tree, Pesoalo and Pinoy Cash Loan on Tuesday. The order covers the company’s owners, operators, promoters, representatives, agents and all persons acting on behalf of the lenders.
“Considering that the Online Lending Operators are not incorporated entities and have no Certificate of Authority to Operate as Lending Companies or Financing Companies, the lending activities and transaction are illegal and have to be stopped immediately by this Commission,” the order said, as quoted in the statement.
The SEC said Peso Tree, Pesoalo and Pinoy Cash Loan had operations through websites, mobile applications, Facebook pages and other online platforms, offering loans to the public.
To do this, a company must secure a certificate of authority as a lending company from the SEC. Failure to do so is a violation of Section 4 of Republic Act No. 9474, or the Lending Company Regulation Act of 2007, which says, “no lending company shall conduct business unless granted an authority to operate by the SEC.”
Apart from operating illegally, the SEC Enforcement and Investor Protection Department found that the concerned lenders impose high interest rates and onerous and misleading terms and conditions, and went as far as publicly humiliating their debtors.
“[T]he Commission cannot turn a blind eye on the fact that the Online Lending Operator’s violation in the instant case was aggravated by the fact that they conducted their business in an unscrupulous manner with evident bad faith, by charging their borrowers unconscionable interest rates, subjecting them to inhumane treatment using abusive and degrading language, and similar other harassment strategies in order to collect debts. This has to stop immediately,” the cease and desist order said.
Aside from being ordered to stop operations and take down any advertisement of the businesses, the violation warrants the persons engaged a fine ranging from P10,000 to P50,000 or imprisonment of six months to 10 years, or both.
The SEC has so far released cease and desist orders to a total of 48 online lending companies, excluding the three new ones, as part of its crackdown on illegal operators. — Denise A. Valdez