By THEPHILBIZNEWS STAFF
The Securities and Exchange Commission (SEC) en banc issued a cease-and-desist order against 12 online lending operators, citing their failure to secure the necessary licenses as well as unfair collection practices.
The order, issued on Oct. 10, 2019, was 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.
“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,” read the order.
Section 4 of Republic Act 9474, or the Lending Company Regulation Act of 2007, requires that a lending company 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.”
“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 en banc said in its order.
The SEC urged the owners and operators of the online lending applications, their agents, representatives and promoters, the owners of their hosting sites and all persons acting for and on their behalf to immediately cease and desist, under pain of contempt, from engaging in, promoting and facilitating unauthorized lending activities.
The Commission also ordered the online lending operators to cease from offering and 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.
Furthermore, the SEC directed any and all persons and entities carrying out, abetting or promoting lending business or similar activities without the requisite license to immediately cease and desist from engaging in such lending activities until they have incorporated and have secured the requisite certificate of authority to operate as lending or financing companies.
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 Section 12 of the Lending Company Regulation Act.