SEC orders 6 online lending firms to stop operations

Share on facebook
Share on twitter
Share on linkedin
Share on email

The Securities and Exchange Commission (SEC) has issued a cease and desist order (CDO) covering six online lending operators.

Image credit:

The agency issued the order on October 24, enjoining the operators and owners of Batis Loan, Happy Credit, Easy Cash, Wahana Credit & Loan Corp., PesoMaMa and Light Kredit to immediately cease and desist under pain of contempt from engaging in, promoting and facilitating unauthorized lending activities.

The SEC also ordered the online lending operators to cease from offering and advertising their lending business through the Internet and to delete or remove promotional presentations and offerings of such lending business from the internet including the lending applications that they operate.

Section 4 of Republic Act No. 9474, or the Lending Company Regulation Act of 2007, requires that a lending company be established only as a corporation. It further provides that “no lending company shall conduct business unless granted an authority to operate by the SEC.”

Any person who shall engage in the business of lending without a validly subsisting authority to operate from the SEC may face a fine ranging from P10,000 to P50,000 or imprisonment of six months to 10 years or both, under Section 12 of the Lending Company Regulation Act.

Certifications issued by the SEC’s Company Registration and Monitoring Department (CRMD) showed that Batis Loan, Happy Credit, Easy Cash, Wahana Credit & Loan Corp., PesoMaMa and Light Kredit were not registered as corporations or partnerships.

The CRMD further attested that the online lending operators were not issued the necessary certificates of authority to operate as lending companies nor had pending applications for such.

Investigations by the SEC Enforcement and Investor Protection Department (EIPD) confirmed the existence and operation of the online lending applications, which have been advertising on social media.

The EIPD further found that the online lending operators have gained access to personal information stored in borrowers’ mobile phones, including social media accounts, contact numbers and email addresses, through their mobile applications.

The online lending operators then used such information to exact prompt payment. They would send a text blast to the borrower’s contacts to inform them about the borrower’s indebtedness and his/her supposed refusal to pay the amount due. In other cases, the borrower would be threatened with legal action or public shaming.

A number of complainants said the abusive collection practices of the online lending operators have caused them depression and sleepless nights, ruined their reputation, and adversely affected their health.

The SEC previously issued three cease and desist orders covering a total of 42 online lending applications for operating without incorporating and securing a certificate of authority.

Facebook Comments

Join Our Newsletter! Zero spam, unsubscribe anytime!

Latest Posts