Bill seeks stronger SEC powers to close digital lenders, detain abusive collectors

A bill seeking to provide the Securities and Exchange Commission (SEC) stronger powers to shut down rogue online lending applications (OLAs) and jail abusive debt collectors has been filed in the House of the Representatives.

House Bill 9738, or the proposed “Fair Debt Collection and Digital Lending Consumer Protection Act,” seeks to address grievances filed with the SEC involving harassment, death threats, and public shaming by unregulated digital lending platforms.

The bill was filed by Quezon City 5th District Representative Patrick Michael Vargas.

Under the proposed measure, the SEC is empowered to impose fines of up to P5 million, suspend or permanently revoke certificates of authority, blacklist responsible corporate officers, and issue immediate cease-and-desist orders against entities employing unfair collection methods.

A Verified Collection Identity System (VCIS) will also be created, requiring all lending companies and third-party collection agencies to register their agents and official communication channels with the SEC.

“Sa pamamagitan ng panukalang ito, binibigyan natin ang SEC ng dagdag na awtoridad para linisin ang digital lending sector, ipasara ang mga iligal na OLA, at panagutin sa batas ang mga nangha-harass,” Vargas said.

(Through this proposed measure, we are giving the SEC additional authority to clean up the digital lending sector, shut down illegal online lending applications, and hold those who engage in harassment accountable under the law.)

The bill further mandates higher penalties for abusive debt collection acts committed using digital technology.

These acts include grave coercion, cyber libel, and the unauthorized processing of private contact lists.

Vargas reminded the public to exercise extreme caution when downloading mobile loan applications.

He urged borrowers to transact only with legitimate, SEC-registered financial institutions.

“While we support financial inclusion, we will never tolerate harassment of any kind. Hindi pwedeng kapalit ng pag-utang sa oras ng pangangailangan ang kawalan ng dignidad at seguridad ng ating mga mamamayan,” Vargas said.

(While we support financial inclusion, we will never tolerate harassment of any kind. Access to loans during times of need should never come at the expense of the dignity and security of our citizens.) — BM, GMA News