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Business

SEC clamps down on erring lending firms

Iris Gonzales - The Philippine Star

MANILA, Philippines — The Securities and Exchange Commission (SEC) has cracked down on more erring lending firms.

It revoked the certificate of authority (CA) of KingABC Lending Corp., which runs online lending platforms Pondo Loan, Start Loan, Green Loan and Loan Club.

This means that KingABC Lending Corp. can no longer operate as a lending company after the SEC found it to be implementing unfair debt collection practices.

In an order dated June 7, the SEC Corporate Governance and Finance Department (CGFD) found KingABC to have committed 15 violations of SEC Memorandum Circular 18, which states the Prohibition on Unfair Debt Collection Practices of Financing Companies and Lending Companies.

KingABC allegedly threatened to shame borrowers on social media by publishing their names as scammers and contacting people in the borrowers’ contact list despite not being named as co-makers or guarantors, the SEC said.

According to the SEC, KingABC also used obscenities, insults, or profane language in its debt collection, and threatened to sue borrowers based on made-up legal bases.

The CGFD previously penalized KingABC for its first and second violations of the memorandum circular. A third violation merits the imposition of either a monetary fine, suspension, or revocation of the company’s CA, depending on the facts, circumstances, and gravity of the case.

“It is likewise clear that at this point, the revocation of respondent’s CA is not merely appropriate, but rather necessitated by the gravity and number of its offenses,” the SEC’s CGFD said, noting that aside from KingABC’s 15 violations, 53 more complaints have been filed against the company for its debt collection practices, as of date of the order.

“Even more telling is the fact that subsequent to the issuance of the formal charge, the abusive collection practices of the respondent only became worse and more hostile based on the evidence submitted by the complainants. The Department noted messages filled with death threats, profanities, and other obnoxious and reprehensible language.”

The revocation of KingABC’s CA brings the total number of financing/lending companies with cancelled licenses due to various violations of SEC rules and regulations to 35.

Last year, the SEC ordered 58 online lending applications to cease operations for lack of authority to operate.

The SEC continues to monitor lending and financing companies for their compliance with applicable laws, rules and regulations.

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