The SEC noted that lending companies should be established as a corporation under section 4 of Republic Act 9474, or the Lending Company Regulation Act of 2007

SEC said the lending apps engaged in abusive collection practices.

The Securities and Exchange Commission (SEC) served cease and desist orders (CDO) against 11 unauthorized online lending apps on complaints the lenders conducted “unreasonable and abusive” lending and collection practices.

The corporate regulator issued the CDO on 20 September against lending apps Cash Whale, Cash 100, Cashafin, CashFlyer, CashMaya, Cashope, Cashwarm, Cashwow, Creditpeso, ET Easy Loan and Peso2Go.

SEC ordered the applications’ owners and operators and other persons acting on their behalf to immediately cease and desist from engaging in, promoting and facilitating what the SEC said are unauthorized lending activities.

They were also ordered to delete or remove promotional presentations online featuring their lending operations. Based on their findings, SEC said the companies do not hold required certificates of authority to operate as lending or financing firms.

The SEC noted that lending companies should be established as a corporation under section 4 of Republic Act 9474, or the Lending Company Regulation Act of 2007. The lending companies should also conduct businesses only as granted by the SEC.

Under the law, people who will engage in lending businesses without the SEC’s authority may face fines ranging from P10,000 to P50,000 or imprisonment of six months to 10 years or both.

Following complaints from the public, the SEC’s Enforcement and Investor Protection Department also found that the lenders subjected the borrowers to several high pressure collection methods, even using their personal information stored in the platforms for coercion.

The lenders were able to access the borrowers’ personal information via their mobile phones, including contact numbers, Facebook accounts and email addresses which were stored in the lending platforms.

SEC said the borrowers were subjected to pressures such as “public humiliation and ridicule, high interest rates, unreasonable terms and conditions, misrepresentations as to non-collection of charges and fees and violation of their right to privacy.”

The abusive collection practices, SEC noted, has gone so far as to bring some borrowers “depression, sleepless nights, humiliation and health issues.”

Earlier on, the SEC has also issued CDO against 19 online lending platforms. The move is part of its crackdown on illegal lending, which has also seen the regulator revoke the certification of registration of 2,081 lending companies for their failure to obtain the necessary certificate of authority to operate as a lending company.

So far, the SEC this year has revoked the certificates of registration of 837 companies who were engaged in lending activities but did not possess the required license to do so.