The Securities and Exchange Commission (SEC) has ordered the immediate shutdown of five online lending operators that are offering loans to the public without any authority or even corporate vehicle to do so.
In an order issued on Feb. 3, the SEC en banc directed Tacoloan, VCash, 365 Cash, SwipeCash, and BootCash to immediately stop their lending and financing businesses as well as related activities until they have incorporated and secured from the SEC their respective certificates of authority to operate as a lending or financing company (CA).
The companies, their agents, representatives and promoters, as well as the owners and operators of their hosting sites, were further enjoined to cease from offering and advertising their lending business through the internet or any other media, and to remove all materials involving such. The SEC found out that all of these five digital lenders have not registered as a corporation. Neither have they secured CAs from the corporate watchdog.
The Lending Company Regulation Act of 2027 (Republic Act No. 9474), requires persons or entities operating as lending companies to register as corporations and to secure from the SEC the necessary authority to operate.
The SEC thus said the issuance of a cease and desist order was warranted in these cases “not only to stop the illegal act, but also to prevent the continued fraud on the public who are led by the online lending operators to the belief that they are a legitimate business.”
In addition to their illegal operations, the SEC has also received complaints about the unfair debt collection practices of the online lending operators.
“The Commission is duty-bound to strictly implement the provisions of the [LCRA], ensure that public interest is at all times upheld, and that the public is protected from persons who carry out unauthorized or illegal lending activities,” the SEC said.