MANILA, Philippines – The Securities and Exchange Commission (SEC) has canceled the license of an online lending application (OLA) for what it described as unfair debt collection practices.
In an order dated January 14, the corporate watchdog’s financing and leasing companies department found Surity Cash violated a 2019 memorandum circular prohibiting unfair debt collection practices.
“Accordingly, FinLend revoked Surity Cash’s Certificate of Authority to operate as a lending company and its primary registration,” the SEC said in a statement.
The SEC did not specify which unfair debt collection practices were used by Surity Cash. However, debt collection practices prohibited under the memorandum circular include the following:
- Use or threatening to use violence to harm a person, reputation, or property of any person
- Use of obscenities, insults or profane language
- Publication of the names of borrowers who supposedly refuse to pay their debt
- Use of false representation or deceptive means to attempt to collect any debt or information on a borrower
- Making contact during unreasonable hours unless the borrowers expressed their written consent
The SEC canceled Surity Cash’s license in response to five formal complaints filed with the agency. It became final and executory after the OLA failed to appeal the decision within the given time.
According to the SEC’s order, Surity Cash told the the agency that its staff had undergone training and the abusive messages did not come from its workers.
However, the SEC noted that the lender failed to provide evidence to support its claims.
While Filipino netizens praised the SEC’s move, they also urged the corporate watchdog to go after other allegedly predatory OLAs.
OLAs have earned a reputation of trapping its clients in an endless debt cycle amid exorbitant interest rates and subjecting borrowers to abusive debt collection tactics.
For 40-year-old Shane, not her real name, she received threats of legal action and even death from an OLA’s debt collectors despite not completing her application for a P2,000 loan.
Shane also had to deactivate her Facebook account in 2022 after debt collectors commented on altered photos showing her inside a coffin on several of her friends’ posts.
“They [debt collectors] were trying to trick them into paying a debt I never even had. They would comment that I had died and they needed to pay the debt I had left behind,” she said in Cebuano.
The Philippine Association of Loan Shark Victims Inc. (PALSVI), a support group for OLP victims, filed cyberbullying, harassment and grave threat complaints against 15 online lending firms in 2023.
The organization also has a petition urging the Office of the President and Senate to shut down “abusive” lending apps. It has 43,259 signatures as of publication.
PALSVI said that several victims have lost their jobs after debt collection agents sent malicious messages to the borrowers’ employers.
“These individuals can no longer return to their normal lives, experiencing broken relationships and friendships—all because of debts they did not intend to evade,” PALSVI’s founder Vanessa Burdeos wrote.
In 2024, the SEC canceled the license of 39 financing or lending firms for violating its rules and regulations. It also ordered the closure of 58 OLPs that did not have the authority to operate as a lending or financing firm. – Rappler.com
*Name has been changed at the borrower’s request for privacy