SEC halts operations of 11 online lending apps

MANILA, Philippines – The Securities and Exchange Commission (SEC) on Monday ordered 11 online lending applications to stop its operations following complaints about unreasonable, and abusive lending and collection practices.
The order, issued by SEC on Sept. 20, covers the following:
- Cash Whale
- Cash 100
- Cashafin
- CashFlyer
- CashMaya
- Cashope
- Cashwarm
- Cashwow
- Creditpeso
- ET Easy Loan
- Peso2Go
The SEC said that based on the findings of its Corporate Governance and Finance Department, the said online lending applications were run by unlicensed operators.
Based on investigation, the commission’s Enforcement and Investor Protection Department (EIPD) also found that these lending applications employ abusive collection practices that subject users to public humiliation and ridicule, high-interest rates, unreasonable terms and conditions, misrepresentations as to non-collection of charges and fees, and violation of their right to privacy, among others.
Probe results showed the unauthorized lenders managed to access personal information kept in a borrower’s mobile phone, such as the contact numbers, Facebook accounts, and email addresses.
The unauthorized lenders then used such information to exact prompt payment.
In many cases, the unauthorized lenders would send a text message to the borrower’s contacts to inform them about the borrower’s indebtedness and supposed refusal to pay the amount due.
In other cases, the borrower would be threatened of legal action or public shaming on social media if payment is not made.
“The rude, high-pressure methods of collection, misrepresentations, and unreasonable terms and conditions imposed by said online lending operators and their agents and representatives exemplify such practices that as a matter of policy, the State seeks to prevent,” the commission said.
The SEC also ordered the said online lending operators to cease from offering and advertising their business online and to remove promotional presentations from the internet.
“The SEC enjoined the owners and operators of the online lending applications, their agents, representatives and promoters, the owners of their hosting sites and all persons acting for and on their behalf to immediately cease and desist under pain of contempt from engaging in, promoting and facilitating unauthorized lending activities,” the agency said.
The regulatory body also directed all persons and entities carrying out, abetting or promoting lending business or similar activities without the requisite license “to immediately cease and desist from engaging in such lending activities until they have incorporated and have secured the requisite certificate of authority to operate as lending or financing companies.”
“Section 4 of Republic Act No. 9474, or the Lending Company Regulation Act of 2007, requires that a lending company be established only as a corporation. It further provides that ‘no lending company shall conduct business unless granted an authority to operate by the SEC,’” it said.
The agency warned that anyone engaging in the lending business without a valid subsisting authority to operate from the SEC may face penalties, including fines up to P50,000 or imprisonment of six months to 10 years or both, under the Lending Company Regulation Act.
The SEC earlier issued a cease and desist order against 19 online lending applications, namely 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.