Connect with us

Business

SEC halts operations of 11 lending apps

AJ Bajo

Published

on

CashMaya is one of 11 lending applications ordered by SEC to cease and desist from operating.

The Securities and Exchange Commission (SEC) served cease and desist orders on 11 unauthorized online lending applications after mounting complaints on “unreasonable and abusive” lending and collection practices.

Lending apps Cash Whale, Cash 100, Cashafin, CashFlyer, CashMaya, Cashope, Cashwarm, Cashwow, Creditpeso, ET Easy Loan and Peso2Go were issued CoDs on 20 September

SEC ordered the owners and operators and other persons acting on their behalf to immediately cease and desist from engaging in, promoting and facilitate 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 SEC findings, the companies do not have the required certificates of authority to operate as lending or financing firms.

Lending companies should be established as a corporation under section 4 of Republic Act No. 9474, or the Lending Company Regulation Act of 2007. The companies should also conduct businesses only as granted by the SEC.

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

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, caused  “depression, sleepless nights, humiliation and health issues” on borrowers.

Earlier on, the SEC has also issued CoD against 19 online lending platforms. The move is part of its crackdown on illegal lending, which also saw 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.

This year alone, the SEC revoked the certificates of registration of 837 companies engaged in lending activities but without the required license.

 

 

 

 

 

Advertisement