The Securities and Exchange Commission (SEC) has ordered seven online lending platforms to stop operations, warning that their unregistered services expose the public to abusive collection practices, unfair interest rates, and possible data privacy violations.
In separate cease and desist orders (CDO) dated 15 August, the SEC Financing and Lending Companies Department (FinLend) directed Cash Konek, Pesosuki, Yescom Lending-Quick Cash Loan, Peso101-Fast Loans PH, Peso Cow-Mabilis Pera Loan, Swiftloan: Loan App Philippines, and Pera Loan: Fast Cash PH to stop promoting or facilitating lending-related transactions without the required registration and approval.
The orders also apply to the companies’ owners, operators, promoters, representatives, agents, and all other persons acting on their behalf.
Series of laws violated
According to FinLend, the firms violated SEC Memorandum Circular (MC) 19, series of 2019, which requires financing and lending companies to disclose their online lending platforms (OLPs). It also breached the moratorium on new registrations imposed on 5 November 2021, under MC 10, series of 2021.
Republic Act 11765, or the Financial Products and Services Consumer Protection Act, allows the SEC to impose enforcement actions such as CDOs against financial service providers that fail to comply with the law and its implementing rules.
The SEC said the unauthorized operations of these firms “circumvent the Commission’s regulatory and supervisory authority, thereby exposing the general public to potential risks, such as abusive and unfair debt collection practices, unjust interest rates, and violation of data privacy rights.”
“In light of the continued unauthorized operation of their OLPs, the Commission finds it necessary to issue these CDOs to prevent further harm or prejudice to the public, and to safeguard the integrity of the regulatory framework governing lending companies,” the orders read.