SEC stops ops of five online lending firms sans registration

The Securities and Exchange Commission (SEC) said Tuesday it has ordered five online lending firms to halt their conduct of lending activities without prior authorization from the corporate regulator.

Citing the order issued on February 3 by the Commission En Banc, the SEC said it directed Tacoloan, VCash, 365 Cash, SwipeCash, and BootCash to "immediately cease and desist from operating, engaging in, carrying out, abetting, and/or promoting lending/financing businesses and related activities until they have incorporated and secured from the agency their respective Certificates of Authority to Operate as a Lending or Financing Company (CA)."

The companies, their agents, representatives and promoters, as well as the owners and operators of their hosting sites, were further enjoined to cease from offering and advertising their lending business through the internet or any other media, and to remove all materials involving such, the corporate regulator said in a statement.

The SEC said it issued the order after finding that none of the said five online lending firms are registered as a corporation, nor have secured CAs from the agency.

Republic Act No. 9474, or the Lending Company Regulation Act of 2007 (LCRA), requires persons or entities operating as lending companies to register as corporations and to secure from the SEC the necessary authority to operate.

“[T]he Commission finds and so holds that the issuance of a CDO is warranted in the instant case not only to stop the illegal act, but also to prevent the continued fraud on the public who are led by the Online Lending Operators to the belief that they are a legitimate business,” said the Commission En Banc.

“The Commission is duty-bound to strictly implement the provisions of the [LCRA], ensure that public interest is at all times upheld, and that the public is protected from persons who carry out unauthorized or illegal lending activities,” it added.

In addition to their illegal operations, the SEC said it has also received complaints about the unfair debt collection practices of the online lending operators.

The corporate regulator earlier directed Goodpocket and EasyMoney Online Lending to stop all lending activities until they have secured the necessary licenses from the SEC.

To see the list of licensed lending and financing companies and their registration status, the public is urged to visit the Lending and Financing Companies corner on the SEC website.—AOL, GMA News