SEC issues CDO vs 4 online lending firms

MANILA, Philippines — The Securities and Exchange Commission (SEC) has ordered the operators of four online lending applications to cease and desist from offering and providing loans to the public,.

The commission en banc issued the cease and desist orders against CashAB, CashOcean, KwikPeso and Little Cash, together with their owners, CashAB Lending Co., Mimosa Credit Ltd. and Zamoya Credit Ltd.

Upon investigation, the SEC found out that CashAB, CashOcean, KwikPeso and Little Cash offered and provided loans to the public without a validly subsisting certificate of incorporation and certificate of authority to operate as a lending or financing company from the SEC.

According to the Lending Company Regulation Act of 2007, no lending company shall conduct business unless granted an authority to operate by the SEC.

The SEC also ordered the online lending operators to cease from offering and advertising their lending business through the internet and to delete or remove their promotional presentations and offerings, including their lending apps

“Any person who shall engage in the business of lending without a validly subsisting authority to operate from the SEC may face a fine ranging from P10,000 to P50,000 or imprisonment of six months to 10 years or both, under Sec. 12 of the Lending Company Regulation Act,” the SEC said.

Similarly, Republic Act No. 5980 or the Financing Act of 1998 punishes the act of engaging in the business of a financing company without the requisite authority from the SEC with a fine of not less than P10,000 and not more than P100,000 or imprisonment for not more than six months or both.

“The Lending Company Regulation Act of 2007 was enacted to prevent and mitigate, as far as practicable, practices prejudicial to public interest,” the SEC said.

“The abusive collection practices, misrepresentations, and unreasonable terms and conditions imposed by the online lending operators and their agents and representatives exemplify the practices that as a matter of policy, the State seeks to prevent,” it added.