Friday, March 1, 2024

SEC stops operations of online lending firms Goodpocket, Easymoney

The Securities and Exchange Commission (SEC) has ordered Goodpocket and Easymoney Lending Corporation to stop conducting lending operations without the necessary licenses from the agency.

Photo from Freepik.com

In an order issued Jan. 18, the SEC directed Goodpocket and Easymoney to immediately cease and desist from engaging in any lending activity until they have secured the necessary approval and authorization from the commission.

The companies were further enjoined to cease from offering and advertising their lending business through the Internet or any other media, and to remove all materials involving such.

The SEC issued the order after finding that Goodpocket and Easymoney have been conducting lending activities despite not being registered as a corporation.

Accordingly, both companies have no Certificates of Authority to operate as a lending or financing company. Republic Act No. 9474, or the Lending Company Regulation Act of 2007 (LCRA), requires persons or entities operating as lending companies to register as corporations and to secure from the SEC the necessary authority to operate.

“Thus, the act of these Online Lending Operators in offering and providing loans to the public constitutes actual fraud, which was intentionally employed to lead the public into the belief that they are legally authorized to engage in the lending business which is not and has never been the case,” the SEC held.

The SEC has received complaints about the companies’ unfair collection processes, including the posting of libelous statements against borrowers on social media and the sending of such statements to their phone contacts.

“The acts of these unregistered Online Lending Operators in illegally offering and providing loans to the public, charging high interest rates, and subjecting its debtors to unfair treatment through abusive and even libelous language in collecting the loaned amount, have no place in a society that is governed by and faithfully adheres to positive laws,” the agency noted.

To date, the SEC said it has canceled the licenses of36 lending companies due to various violations of applicable rules and regulations. It has also revoked the certificate of registration of a total of 2,081 lending companies for their failure to secure the requisite certificate of authority.

In total, 60 online lending applications have been ordered to cease operations for lack of authority to operate as a lending or financing company.

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