Saturday, March 2, 2024

46 workers of online lending firm arrested for operating unregistered apps

Acting in coordination with the Securities and Exchange Commission (SEC), local police authorities have arrested 46 employees of an online lending company for operating unauthorized lending apps.

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In a joint operation on Feb. 12, the combined forces of the SEC Enforcement and Investor Protection Department (EIPD) and the Philippine National Police Anti-Cybercrime Group (PNP-ACG) implemented a warrant to search, seize, and examine computer data in Cashtrees Lending Corporation’s office in Pasig City.

The Manila Regional Trial Court Branch 46 issued the search warrant against Cashtrees Lending for misuse of device penalized under the Cybercrime Prevention Act of 2012, in operating unregistered online lending applications in violation of the Lending Company Regulation Act (LCRA).

Cashtrees Lending is registered as a corporation and holds a certificate of authority to operate as a lending company. It operates registered online lending platforms such as Happylend, Creditcash, and Cashmore.

However, majority of the online lending applications operated by Cashtrees Lending were unregistered. These include Goodpocket, Easymoney, 365 Cash, and Rushloan, which have been the subject of cease and desist orders issued by the SEC.

Following the digital forensic examination, the PNP-ACG arrested 46 employees, including the manager of Cashtrees Lending, for violating the Cybercrime Prevention Act of 2012 and the LCRA.

On February 13, the SEC-EIPD and PNP-ACG filed with the Department of Justice an inquest complaint against the arrested employees.

The SEC said it has been receiving numerous complaints against online lending applications (OLAs) for various violations of the LCRA and for abusive debt collection practices.

In response, the agency has created a task force to handle complaints involving online lending operators and to take the appropriate measures to stop lending companies and their operators from engaging in abusive practices and activities.

The task force coordinates with other law enforcement agencies such as the PNP-ACG and the National Bureau of Investigation to crackdown on illegal online lending applications.

To date, the SEC said it has canceled the licenses of 36 financing/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, 72 online lending applications have been ordered to cease operations for lack of authority to operate as a lending or financing company. In addition, the SEC has secured the convictions of 74 individuals for violation of the LCRA.


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