Philippines Cracks Down on Online Lendersby Fintechnews Singapore October 21, 2019
Philippines’ Securities and Exchange Commission issued a statement prohibiting another batch of 13 online lending operators from further engaging in lending activities.
The regulator issued an immediate cease and desist to the owners and operators from promoting and facilitating unauthorised lending activities.
Under Philippines regulations, a lending company must be granted approval from the SEC to operate, and anyone found in violation of the law may face a fine ranging from 10,000 pesos (566 USD) to 50,000 pesos (2614 USD) or imprisonment of six months to 10 years or both.
Authorities further found that online lending operators have gained access to personal information stored in borrowers’ mobile phones, including social media accounts, contact numbers and email addresses, through their mobile applications. The online lending operators then used such information to exact prompt payment.
They would send a text blast to the borrower’s contacts to inform them about the borrower’s indebtedness and his/her supposed refusal to pay the amount due. In other cases, the borrower would be threatened of legal action or public shaming.
A number of complainants said the abusive collection practices of the online lending operators, their agents and representatives have caused them depression and sleepless nights, ruined their reputation and adversely affected their health.
The SEC earlier issued two cease and desist orders covering a total of 30 online lending applications. More information is available on the Financing & Lending Companies page on the Commission’s website.
As a response to this growing issue, members of FinTechAlliance.ph agreed to adopt a code of conduct for responsible online lending.
Featured image credit: edited from Freepik