3 lending firms' execs face jail term, fines for 'shaming' borrowers –NPC

The National Privacy Commission said Friday that executives of three online lending companies are liable for a seven-year jail term and fines of up to P5 million for violating the Data Privacy Act of 2012, allegedly for shaming their borrowers.

In a press conference in Pasay City, Privacy Commissioner Raymund Liboro said the commission's task force has concluded its investigation and found that the business models of Fast Cash Global Lending Inc., Unipeso Lending Company Inc., and Fynamics Lending Inc. are "violative of the Data Privacy Act."

The number of complaints against the three represents 61% of the total of 921 grievance notices received by the NPC concerning the following:

• Use of contact list without consent
• Disclosure of unwarranted or false information to other persons
• Use of personal information for harassment and threatening communications
• Unduly intrusive personal data processing

"Our investigation determined that their business practice specifically targets the privacy of persons, practically making profit out of people's fear of losing face and dignity. These unethical practices simply have no place in a civilized society and must stop," Liboro said.

NPC's findings, he said, include:

• Statements from complaints about the illegal and unauthorized processing of personal information
• Failure to demonstrate compliance with Data Privacy Act, and issuances of the NPC such as late registration, inadequate notice, and consent
• Use of applications with "dangerous permissions," allowing the company to access phone directory, camera, location and storage of devices where the application is downloaded and installed
• Evidence showing unauthorized processing, processing for unauthorized purpose, malicious disclosure, and unauthorized disclosure.

"These companies and their directors are now given the opportunity to respond to these charges and are given 10 days to file an answer," Liboro said.

"If the directors and these companies fail to answer, this Commission will render a decision based on available evidence," he added.

These online lending companies may face possible "stop processing" orders the Privacy chief said.

"Criminal prosecution may also be recommended against its directors before the Department of Justice with imposable penalties of up to seven years imprisonment and fines up to P5,000,000.00," Liboro said.

Also, the directors who are responsible officers of the online lending companies would have to explain and answer the charges before the NPC.

According to him, the NPC is not stopping at three online lending companies and hearings and investigations are ongoing for other firms.

"In addition to this independent investigation, the Commission is coordinating closely with the Federal Trade Commission through Cross-border Privacy Enforcement Arrangement."

"We are also set to coordinate with other regulatory bodies in efforts to stop these abusive practices," he said.

Further, the NPC intends to have the apps of the three online lending firms taken down from Google Play Store.

"We would like to caution the people on downloading mobile applications, particularly online lending application. Please read the terms and conditions carefully, for it may include dangerous permissions such as access to your live location, phone books, and social media account, and even camera control. Let us be responsible for our safety and protection of our personal data," Liboro said. —LBG, GMA News