SEC to establish division to monitor financing, lending firms

The Securities and Exchange Commission (SEC) is set to establish a new division that will focus on financing and lending firms as part of a crackdown against abusive lenders in line with the Lending Company Regulation Act (LCRA).

According to the Department of Finance (DOF), the SEC reported that it will focus its campaign on abusive lending firms after it received complaints regarding abusive collection practices involving threatening or insulting borrowers.

The SEC has already set up an online team which conducts sweeping operations and monitors complaints, and reviews social media platforms to check on possible abusive or illegal lending practices.

The corporate regulator said it revoked the registration of 2,081 firms, and secured the conviction of 76 individuals in eight cases for violations of the LCRA. It also issued cease and desist orders against 73 online apps, and canceled the licenses of 36 financing or lending companies.

Its crackdown has been carried out in collaboration with the Philippine National Police, which recently obtained a warrant to search, seize, and examine the computer records of Cashtrees Lending Corp. in its Pasay offices.

Over 45 workers of the firm, including a Chinese national, were arrested last month for supposedly harassing and threatening clients unable to pay their loans within the prescribed period.

The SEC and the National Privacy Commission (NPC) earlier warned firms against unfair debt collection practices.

Such practices included sending violent threats, using harsh words, disclosing the name and other personal information of the borrower in public, and messaging or calling the people on the contact list of the borrower without his/her consent.

Lending firms caught practicing such methods may be fined P25,000 to P1 million, along with the revocation of their certificate of authority to operate. —VBL, GMA News