The Securities and Exchange Commission (SEC) has imposed a P1 million fine against Surity Cash Lending Investors Corporation for its unfair debt collection practices.
In a decision dated September 16, the Commission En Banc resolved to impose the fine against Surity Cash after it was found to have committed three counts of violation of SEC Memorandum Circular (MC) No. 18, Series of 2019, which provides for the prohibition on unfair debt collection practices of financing and lending companies.
Surity Cash was found liable for two counts of violating Section 1 of MC 18, which prohibits the use threat of violence to or criminal means to harm a person, reputation or property, use of obscenities, insults or profane language, and disclosing the names and personal information of borrowers who refuse to pay debts, among others, in debt collection.
The company was also found to have violated Section 4 of the MC for its late submission of a sworn certification stating the company’s compliance with the requirement to establish a customer service department or designation of a personnel to cater to borrowers’ complaints and concerns.
Section 4 further mandates financing and lending companies to adopt a policy requiring personnel handling the collection of accounts to disclose their full name or identity to borrowers.
While it allowed the lending company to keep its corporate registration, the Commission En Banc issued a stern warning against Surity Cash.
“While this Commission is not imposing the penalty of suspension or the supreme penalty of revocation at this time, unfair or abusive debt collection and recovery practices have no place in the lending/financing industry. These practices will never be considered reasonable and legally permissible means to collect a loan,” the decision read.
“The instant decision should therefore be considered by the corporation as a stern and final warning that another, or a repeated violation of MC No. 18, and other applicable laws, rules and regulations will be dealt with more severely,” it added.
