SEC flags new batch of online lenders

MANILA, Philippines — The Securities and Exchange Commission (SEC) has flagged another batch of online lenders, ordering them to stop their lending activities.

Last Oct. 10, the SEC slapped cease and desist orders against A&V Lending Mobile, A&V Lending Investor, A.V. Lending Corporation, Cashaku, Cashaso, CashEnergy, Happy Loan, Peso Pagasa, Vito Lending Corp., Phily Kredit, Rainbow-Cash and Rainbowcash.Ph Lending Corp.

In its order, the SEC said these companies should stop advertising their lending business through the internet and to delete or remove promotional presentations and offerings of such lending business from the internet including the lending applications that they operate.

The SEC said these entities are not authorized to implement lending activities.

“Considering that the online lending operators are not incorporated entities or have no Certificate of Authority to Operate as Lending Companies or Financing Companies, the lending activities and transaction are illegal and have to be stopped immediately by this Commission,” the orders said.

“Moreover, the abusive collection practices engaged in by unlicensed online lending companies constitute unfair debt collection practices which the Commission expressly prohibits under SEC Memorandum Circular No. 18, Series of 2019 (Prohibition on Unfair Debt Collection Practices of Financing Companies and Lending Companies) which took effect recently,” the SEC said.

Based on the findings of the SEC Corporate Governance and Finance Department (CGFD), the online lending applications and their operators do not have the necessary papers and permits.

In the case of A&V Lending Mobile, the CGFD found no record of the registration of its purported operator, A&V Lending Investor.

A certain A.V. Lending Corp. turned up in the SEC database, but its registration has already been revoked.

Peso Pagasa and Rainbow-Cash are reportedly operated by Vito Lending Corp. and Rainbowcash.Ph Lending Corp., respectively.

However, no such corporations are recorded in the Commission’s database, the SEC said.

A number of complainants said many of these lending companies engage in abusive collection practices.

According to Section 4 of Republic Act 9474, or the Lending Company Regulation Act of 2007, a lending company must be established only as a corporation.

It further provides that “no lending company shall conduct business unless granted an authority to operate by the SEC.”

Violators will be penalized, the SEC said.