SEC shuts down 19 online lending companies

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Metro Manila (CNN Philippines, September 16) — The country's corporate regulator has shut down 19 illegal online lending firms following complaints of invasion of privacy and harassment.

In a statement Monday, the Securities and Exchange Commission (SEC) said it issued cease and desist order on September 12 against Instant Pera, QuickPera, Lendmo Philippines, Binixo, CashBus, Cashcat, Cashuttle, Crazy Loan, Flash Cash, Happy2Peso, Hatulong, MeLoan, MoneyTree Quick Loan, Pera Express, Pera4u, Peramart, PesoLending, QuickPeso and Umbrella.

SEC said the companies lack the required certificate to operate as lending or financing companies and are not registered with the agency as a corporation.

The firms, SEC said, violated the Lending Company Regulation Act of 2007 which only allows a lending company to be established by a corporation and operate only if authorized by the SEC. Penalty for violating the policy includes a fine of up to ₱50,000 and imprisonment of six moths to 10 years.

The commission said it probed the said companies after receiving complaints such as high interest rates, unreasonable terms and conditions, misrepresentations as to non-collection of charges and fees, violation of their right to privacy, harassment and other abusive collection practices.

"The unauthorized lenders’ privacy violations and abusive collection techniques ranged from accessing a borrower’s personal information to contacting a borrower’s relatives, friends and acquaintances and threatening them with public shaming," it said.

The illegal lenders managed to access personal information kept in the borrowers’ mobile phones, such as names and contact numbers through the online lending applications, according to SEC.

It added that some users experienced depression, sleepless nights, humiliation, and health issues due to the high pressure and abusive collection practices of the companies.