The Securities and Exchange Commission (SEC) has issued cease and desist orders (CDO) against seven companies for operating online lending platforms (OLP) that are unregistered with the Commission.
In separate orders dated August 15, the SEC Financing and Lending Companies Department (FinLend) directed Cash Konek, Pesosuki, Yescom Lending-Quick Cash Loan, Peso101-Fast Loans PH, Peso Cow-Mabilis Pera Loan, Swiftloan:Loan App Philippines, and Pera Loan: Fast Cash PH from promoting or facilitating lending-related transactions without the necessary registration and approval from the Commission.
The orders also cover the companies’ owners, operators, promoters, representatives, agents, and any and all persons claiming or acting on their behalf.
The operations of the companies’ unrecorded OLPs constitute a violation of SEC Memorandum Circular (MC) No. 19, Series of 2019, which requires financing and lending firms to disclose their OLPs.
Likewise, their operations violated the moratorium on the registration of new OLPs imposed on November 5, 2021, as per MC No. 10, Series of 2021.
Republic Act No. 11765, or the Financial Products and Services Consumer Protection Act, authorizes the SEC to impose enforcement actions, such as a CDO, against financial service providers for noncompliance with the provisions of the law, its implementing rules, and other applicable laws.
The companies’ operations of unregistered and undisclosed OLPs circumvent the Commission’s regulatory and supervisory authority, thereby exposing the general public to potential risks, such as abusive and unfair debt collection practices, unjust interest rates, and violation of data privacy rights, according to FinLend.
“In light of the [companies’] continued unauthorized operation of [their OLPs], the Commission finds it necessary to issue [these CDOs] in order to prevent further harm or prejudice to the public, and to safeguard the integrity of the regulatory framework governing lending companies,” the orders read.
