The Securities and Exchange Commission said Monday it ordered the closure of 12 more online lending operators for allegedly operating without the necessary licenses.
The SEC said that on Oct. 10, it issued cease and desist orders against A&V Lending Mobile, A&V Lending Investor, A.V. Lending Corp., Cashaku, Cashaso, CashEnergy, Happy Loan, Peso Pagasa, Vito Lending Corp., Phily Kredit, Rainbow-Cash and Rainbowcash.Ph Lending Corp.
It also directed the owners and operators of the online lending applications, their agents, representatives and promoters and the owners of their hosting sites to immediately cease and desist, under pain of contempt, from engaging in, promoting and facilitating unauthorized lending activities.
The regulator also ordered the online lending firms to stop from offering and advertising their lending business through the internet and to delete or remove promotional presentations and offerings of such lending business from the internet including the lending applications that they operate.
“Considering that the online lending operators are not incorporated entities or 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 stated.
“Moreover, the abusive collection practices engaged in by unlicensed online lending companies constitute unfair debt collection practices which the commission expressly prohibits under SEC Memorandum Circular No. 18, Series of 2019 [Prohibition on Unfair Debt Collection Practices of Financing Companies and Lending Companies] which took effect recently,” it said.
Investigations by the SEC Enforcement and Investor Protection Department confirmed the existence and operation of the online lending applications which have been advertising on social media.
The EIPD found that the online lending operators had 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. In other cases, the borrower would be threatened with legal action or public shaming.
A number of complainants said the abusive collection practices of the online lending operators, their agents and representatives caused them depression and sleepless nights, ruined their reputation and adversely affected their health.
The SEC earlier issued cease and desist orders against 30 online lending apps.