SEC orders three more online lending firms to stop illegal operations
CEBU CITY–The Securities and Exchange Commission (SEC) has ordered three more online lending firms to stop their illegal operations.
SEC, in an emailed press statement, said Peso Tree, Pesoalo and Pinoy Cash Loan did not have the necessary licenses to offer loans to the public.
The three firms offered loans to the public through their respective websites, mobile applications, Facebook pages and other solar online platforms, according to the findings of SEC’s Corporate Governance and Finance Department and the Enforcement Investor Protection Department (EIPD).
The commission en banc issued the order on January 21, 2020.
The order directed the owners, operators, promoters representatives, agents and all those acting for and in their behalf to immediately cease and desist in engaging in, promoting and facilitating unauthorized lending activities. Those who would violate this order would be “under the pain of contempt.”
SEC also ordered the three firms to cease from offering and advertising their lending business through the internet.
They are also required to delete or remove from the internet their promotional presentations and offerings, including the lending applications they operate.
The commission cited Section 4 of the Republic Act No. 9474 or the Lending Company Regulation Act if 2007 as one of the basis for the beir order.
The law requires that a lending company should be established only as a corporation. This law mandated that ‘no company shall conduct business unless granted an authority to operate by SEC.
However, the Company Registration and Monitoring Department of SEC certified that Peso Tree, Pesoalo and Pinoy Cash Loan were not registered as corporations and we’re not issued the certificate of authority to operate as lending companies.
The EIPD also found that these only be lending operators employed abusive collection practices by imposing high interest rates, onerous and misleading terms and conditions. They also made misrepresentations as to non-collection charges and fees.
The three were also found to have subjected their debtors to public humiliation and ridicule, which violated their right to privacy, to ensure prompt and full collection of their debts.
Under Section 12 of this law, those who violate this law could face a fine ranging from P10,000 to P50,000 or imprisonment of six months to 10 years or both.
Since the three online lending firms were not incorporated entities and did not have a certificate of authority to operate as lending companies or financing companies, the order deemed that their lending activities and transaction were illegal and have to be stopped immediately.
“Finally, the Commission cannot turn a blind eye on the fact that the Online Lending Operator’s violation in the instant case was aggravated by the fact that they conducted their business in an unscrupulous manner with evident bad faith, by charging their borrowers unconscionable interest rates, subjecting them to inhumane treatment using abusive and degrading language, and similar other harassment strategies in order to collect debts. This has to stop immediately,” the commission maintained in its order.
The SEC earlier issued cease and desist orders covering a total of 48 online lending platforms and their operators for engaging in the business of lending or financing without incorporating and securing a certificate of authority./bmjo
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