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FinTech Alliance commits to code of ethics

Louella Desiderio (The Philippine Star) - September 18, 2019 - 12:00am

MANILA, Philippines — FinTech Alliance.PH, which groups financial technology and digital firms, has committed to promote a code of ethics and adopt a code of conduct for responsible lending following the move of the National Privacy Commission (NPC) to recommend criminal charges against officials of three online lenders for data privacy violations.

FinTech Alliance’s initiative also comes as the Securities and Exchange Commission (SEC) issued a cease and desist order against 19 online lending applications operated by unlicensed persons and entities, amid complaints of invasion of privacy and harassment.

“Technoethics is a framework on the ethical utilization of emerging technologies, protecting consumer against the misuse and abuse of innovations, and adoption of common principles to guide players about new advances in technological development and application to benefit society,” FinTech Alliance chairman Lito Villanueva said.

The initiative involves setting standards for the industry to promote transparency and protect customers from any possible malpractices and other unethical actions of fintech players.

In particular, fintech players would not be allowed to use customer data with the objective of disbursing more loans.

Fintech players’ practice of intimidation to collect from borrowers is likewise prohibited.

Alliance members providing online lending would be required to fully disclose all costs of customers including interest rates, processing fees and fines for late payment. 

The alliance decided to adopt the initiative to protect consumers from unscrupulous and abusive online lenders, as well as safeguard industry players with good practices as the NPC earlier this month, recommended criminal charges against the officials of online lending firms Fast Cash Global Lending Inc. (Fast Cash app), Unipeso Lending Co. Inc. (Cashlending), and Fynamics Lending Inc. (PondoPeso) for violations of the Data Privacy Act for their business practice of shaming borrowers by targeting their privacy in order to collect payments.

Complaints received by the NPC include online lending firms’ use of borrowers’ contact list without consent or authority; disclosure of unwarranted or false information to other persons; use of personal information for harassment; and unduly intrusive personal data processing.

Regulators such as the SEC and the NPC welcome the move of the FinTech Alliance and have committed to work closely with the private sector as well as other government agencies like the Bangko Sentral ng Pilipinas and Department of Trade and Industry  to promote safety and security of consumers.

In line with the corporate regulator’s commitment, SEC Commissioner Kelvin Lee said a cease and desist order was issued last Sept. 12, against 19 online lending applications such as Instant Pera, QuickPera, Lendmo Philippines, Binixo, CashBus, Cashcat, Cashuttle, Crazy Loan, Flash Cash, Happy2Peso, Hatulong, MeLoan, MoneyTree Quick Loan, Pera Express, Pera4u, Peramart, PesoLending, QuickPeso and Umbrella.

“Based on the findings of the SEC Corporate Governance and Finance Department and Enforcement and Investor Protection Department, the owners and operators of the online lending applications have not secured the required certificates of authority to operate as lending or financing companies. Furthermore, they are not registered as a corporation with the SEC,” he said.

He said SEC decided to conduct investigations on lending activities of the online apps as they received complaints on high interest rates, unreasonable terms and conditions, misrepresentations as to non-collection of charges and fees, as well as violation of right to privacy and other abusive practices such as accessing borrower’s personal information to contact a borrower’s relatives, friends and acquaintances, as well as threatening public shaming and harassment.

FINTECH ALLIANCE.PH
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