The Philippine Securities and Exchange Commission (SEC) ordered the shutdown of three illegal online lenders last January 21, 2020. The SEC’s order came after discovering that the three online lending platforms operated without proper licenses.
The three platforms are Peso Tree, Pesoalo, and Pinoy Cash Loan. According to Inquirer, all three of these establishments failed to register their business corporations, thus failing to secure the appropriate license and certificate to proceed with operations.
Business World Online reports that Peso Tree, Pesoalo, and Pinoy Cash Loan were all accessible via websites and mobile applications. The entities also had Facebook pages and other social media platforms to offer its lending services to the public.
In a statement, the Securities and Exchange Commission said, “Considering that the Online Lending Operators are not incorporated entities and have no Certificate of Authority to Operate as Lending Companies or Financing Companies, the lending activities and transaction are illegal and have to be stopped immediately by this Commission.”
Apart from ordering the immediate shutdown of the lenders, the SEC also issued a cease and desist order, which said, “The Commission cannot turn a blind eye on the fact that the Online Lending Operator’s violation in the instant case was aggravated by the fact that they conducted their business in an unscrupulous manner with evident bad faith, by charging their borrowers unconscionable interest rates, subjecting them to inhumane treatment using abusive and degrading language, and similar other harassment strategies in order to collect debts. This has to stop immediately.”
This instructs operators, lenders, and other individuals concerned to stop operations, including promotions and other unauthorized activities, notes Inquirer.
Apart from illegal lending, Business World Online revealed that the three lenders were guilty of participating in inhumane practices. According to the SEC Enforcement and Investor Protection Department, the lenders allegedly publicly humiliated borrowers as well as provided misleading terms and conditions. Moreover, the businesses were found to have imposed high-interest rates on their loans.
In line with these allegations, the lenders will be charged with P10,000 to P50,000. They may also be imprisoned for 6 months to 10 years.