SEC orders 3 online firms to stop alleged illegal online lending activities

The Securities and Exchange Commission (SEC) has ordered three online platforms to stop offering loans allegedly without the necessary licenses.

Identified as Peso Tree, Pesoalo, and Pinoy Cash Loan, the online platforms were found by the SEC to have offered loans to the public through their respective websites, mobile applications, Facebook pages, and other similar media.

"Certifications by the SEC Company Registration and Monitoring Department (CRMD)... showed that Peso Tree, Pesoalo and Pinoy Cash Loan were not registered as corporations and that they were not issued the necessary certificate of authority to operate as lending companies," the SEC said.

In an order dated January 21, the Commission En Banc enjoined the owners, operators, promoters, representatives, agents, and any and all persons claiming and acting in their behalf to immediately cease and desist the unauthorized lending activities.

Under Section 4 of Republic Act No. 9474 or the Lending Company Regulation Act of 2007, lending companies are required to be established only as a corporation.

"No lending company shall conduct business unless granted an authority to operate by the SEC," it stated.

Violators may be fined from P10,000 to P50,000 or imprisonment of six months to 10 years, or both.

"Considering that the Online Lending Operators are not incorporated entities and have no Certificate of Authority to Operate as Lending Companies or Financing Companies, the lending activities and transaction are illegal and have to be stopped immediately by this Commission," the order read.

"Finally, the Commission cannot turn a blind eye on the fact that the Online Lending Operator's violation in the instant case was aggravated by the fact that they conducted their business in an unscrupulous manner with evident bad faith, by charging their borrowers unconscionable interest rates, subjecting them to inhumane treatment using abusive and degrading language, and similar other harassment strategies in order to collect debts. This has to stop immediately," the SEC said.

Prior to this, the SEC has already issued cease and desist orders covering a total of 48 online lending platforms for engaging in lending or financing without incorporating and securing a certificate of authority. —KG, GMA News