SEC takes action against internet lenders for engaging in abusive and unlawful behavior

In a series of enforcement actions throughout July, the Securities and Exchange Commission (SEC) has stepped up its fight against negligent internet lenders by rescinding licenses, imposing heavy fines, issuing cease and desist orders, and initiating criminal charges.

173 employees, officials, and owners of Creditable Lending Corp., the company that runs Easypeso, were the targets of criminal accusations brought by the SEC, the National Bureau of Investigation (NBI), and the National Privacy Commission (NPC) for allegedly using abusive collection practices.

Computers, cell phones, SIM cards, and scripts reportedly used to harass borrowers were seized as a result of the combined investigation, which also resulted in arrests at the company’s Pasig office.

The corporation is facing charges related to violations of the Cybercrime Prevention Act (RA 10175), the Data Privacy Act (RA 10173), and the Financial Products and Services Consumer Protection Act (RA 11765).

The SEC halted Creditable Lending’s operations and marketing efforts after the raid by issuing a cease-and-desist order. The government’s Task Force on Online Lending Applications has been investigating the company because of several allegations of harassment.

CDO Opposes Hinance Lending

Hinance Lending Investors Corp., the company behind HotCash, VI Peso, and KindCash, was also ordered by the SEC to cease operations for operating Magic Peso, an unlicensed online lending business.

The company was highlighted by the SEC for violating regulations that govern the use of online lending platforms (OLPs) and for not disclosing the platform in its business strategy.

LHL Online Lending was penalized for using dishonest tactics.

Operating under the names Pautang Online and Pautang Peso, LHL Online Lending Inc. was fined ₱129,000 for violating the Truth in Lending Act by providing false loan terms.

The corporation was determined by the SEC to have concealed surcharges on borrowers who did not fulfill the reduced payback deadlines and to have misrepresented loan repayment periods.

The penalty for Link Credit Lending is ₱1 million.

Link Credit Lending Investors Inc., operating under the names iPeso and Pesoin, was fined ₱1 million by the SEC for breaking laws prohibiting unfair debt collection methods.

The corporation utilized threats and intimidation, including calling borrowers’ emergency contacts and coworkers, according to complaints filed between September 2022 and March 2023.

The license of Convenience Cash Lending has been canceled.

More severely, Convenience Cash Lending Corp., the company behind Zada Cash and BloomCash, had its corporate registration and license canceled by the SEC for sending threatening letters and even burial services to borrowers.

Four official cases served as the foundation for revocation out of the more over 600 complaints that were received. Due to the company’s refusal to register with the Credit Information Corporation as required by RA 11765, the SEC had already issued a cease-and-desist order.

Due to its unregistered website, Jia Financing has been suspended.

Finally, Jia Financing Inc. was fined ₱10,000 and suspended for 60 days by the SEC for operating the website jia.ph without declaring it in its business plan, which violates a moratorium on new OLPs.

In violation of disclosure regulations, the business also withheld information on significant loan offerings with amounts ranging from $50,000 to $200,000.