The Securities and Exchange Commission (SEC) has ordered three online companies to cease unauthorized lending activities and their use of abusive collection practices.
In an order issued on April 26, the Commission En Banc ordered Golden Cash, Help Cash and Grace Cash to immediately cease and desist from engaging in, performing, promoting and facilitating any activity or transaction of ready until they have obtained the necessary registration and license. of the SEC.
Owners, operators, promoters, representatives and agents of online lending operators have also been ordered to stop engaging in unfair debt collection practices, as defined in SEC Memorandum No. 18, Series of 2019 (MC 18).
The Commission also ordered online lending operators to stop offering and advertising their lending business via the internet or any other media, and to remove material implicating them.
The SEC issued the order after finding that Golden Cash, Help Cash and Grace Cash are not registered as companies with the Commission. As such, they cannot obtain a certificate of authorization to operate as a loan/finance company.
The Credit Companies Regulation Act of 2007 (LCRA) requires persons or entities operating as loan companies to register as companies and obtain the necessary authorization from the SEC to operate.
“The Commission finds that the continued business of Golden Cash, Help Cash and Grace Cash constitutes a clear violation of the (LCRA) and should be sanctioned under it, as it engages or engages in lending activity without the required license from the Commission,” the En Banc Commission said.
Findings from the SEC’s Enforcement and Investor Protection Department (EIPD) also revealed that online lending operators were engaging in unfair collection practices, prohibited by MC 18.
SIFT noted that online lending operators harass, threaten, publicly humiliate their respective borrowers and charge hidden fees and excessive processing fees.
“The acts of these unregistered online lending operators of illegally offering and providing loans to the public, charging high interest rates and subjecting its debtors to unfair treatment through abusive language and even defamatory in the collection of the amount lent…have no place in a society that is governed by and faithfully adheres to positive laws,” the En Banc Commission noted.
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