SEC shuts down 6 online lending apps found shaming customers
MANILA, Philippines (UPDATED) – The Securities and Exchange Commission (SEC) issued cease and desist orders against 6 online lending operators for doing business without the agency’s approval and employing shame tactics on consumers.
The SEC En Banc ordered on Thursday, October 24, the closure of the following companies:
- Batis Loan
- Happy Credit
- Easy Cash
- Wahana Credit and Loan Corporation
- Light Kredit
There are legitimate companies with names similar to the ones ordered closed by the SEC, and are still operating. The list of approved companies can be found here.
The Lending Company Regulation Act mandates lending companies to be established as a corporation. The 6 companies listed were not registered as corporations or partnerships.
The companies did not even have pending applications for such requirements from the SEC.
The SEC also found that the online lending operators have gained access to personal information stored in borrowers’ mobile phones, including social media accounts, contact numbers and email addresses, through their mobile applications.
“The online lending operators then used such information to exact prompt payment. They would send a text blast to the borrower’s contacts to inform them about the borrower’s indebtedness and his/her supposed refusal to pay the amount due,” the SEC said.
Customers were also threatened with legal action or public shaming, adversely affecting their reputation.
The SEC previously issued three cease and desist orders covering a total of 42 online lending applications for operating without incorporating and securing a certificate of authority. The complete list can be found here. – Rappler.com