Sunday, May 26, 2024

SEC revokes license of online lending firm for unfair debt collection practices

The Securities and Exchange Commission (SEC) said it has canceled the certificate of authority (CA) of FCash Global Lending to operate as a lending company for its unfair debt collection practices.

In an order dated August 25, the SEC found FCash liable for multiple violations of SEC Memorandum Circular No. 18, Series of 2019, which provides for the Prohibition on Unfair Debt Collection Practices of Financing Companies and Lending Companies.

The company, which operates online lending platforms Fast Cash and Fast Cash Loan, has made multiple attempts to collect loan payments by contacting or threatening persons other than those that the borrower has identified as guarantors or co-makers, according to the SEC.

FCash has likewise sent messages threatening borrowers with charges for estafa, complaints before the National Bureau of Investigation, and service of writ of garnishment or writ of attachment.

Furthermore, FCash threatened to report borrowers to their respective employers and used abusive words when talking to them over the phone.

The SEC also noted how FCash took advantage of borrowers’ lack of awareness of legal terminologies to compel them to pay their loans.

The Commission initially imposed a fine of P25,000 against FCash for its first violation on September 25, 2019 and another fine amounting to P50,000 for its second violation on September 26, 2019. On December 12, 2019, the SEC formally charged FCash for its third violation.

FCash contended that it should not be charged with violating SEC MC 18 based on complaints involving loan transactions consummated prior to the effectivity of the circular.

“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 noted.


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