Another 6 ‘unauthorized’ online lending firms shut down

Metro Manila (CNN Philippines, October 28) — The country’s corporate regulator continues its crackdown on illegal lending activities—this time targeting another six online companies which it deemed "unauthorized".

In a statement Monday, the Securities and Exchange Commission (SEC) said the companies include Batis Loan, Happy Credit, Easy Cash, Wahana Credit & Loan Corp., PesoMaMa, and Light Kredit.

The SEC said a cease and desist order was issued to each of the companies on October 24.

The lending operators were also ordered to stop offering and advertising their lending business online.

The SEC said it found out that the six companies were not registered as corporations or partnerships, violating Republic Act No. 9474 or the Lending Company Regulation Act of 2007, which requires a lending company to be established only as a corporation.

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They also lack the necessary certificates of authority to operate as lending companies and pending applications for such, the SEC said.

Furthermore, the regulator said its Enforcement and Investor Protection Department found out that the lending operators have gained access to personal information stored in borrowers’ mobile phones, including social media accounts, contact numbers and email addresses, through their mobile applications.

According to SEC, the companies used the information to exact prompt payment.

“They would send a text blast to the borrower’s contacts to inform them about the borrower’s indebtedness and his/her supposed refusal to pay the amount due. In other cases, the borrower would be threatened with legal action or public shaming,” it said.

The SEC added that a number of complainants said the abusive collection practices of the online lending operators have caused them depression and sleepless nights, ruined their reputation, and adversely affected their health.

The corporate regulator had previously ordered the closure of 42 online lending applications for operating without incorporating and securing a certificate of authority.