SEC and BSP step up crackdown on online lenders and money changers

MANILA, Philippines — Three online lending operators have been ordered by the Securities and Exchange Commission (SEC) to cease operations.

The SEC prevented Golden Cash, Help Cash and Grace Cash from conducting lending activities without the necessary authorization and from employing abusive collection practices.

Owners, operators, promoters, representatives and agents of online lending operators have also been ordered to stop engaging in unfair debt collection practices.

Similarly, the three online lenders have been ordered to stop offering and advertising their lending business on the Internet or any other media, and to remove any records relating to them.

The order was issued by the SEC on April 26 after finding that Golden Cash, Help Cash and Grace Cash are not registered as companies with the commission.

Findings from the SEC’s Enforcement and Investor Protection Department (EIPD) also showed that online lending operators were engaging in unfair collection practices.

SIFT said 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 SEC said.

Similarly, the Bangko Sentral ng Pilipinas (BSP) has blacklisted two other unregistered money changers based in Batangas and Pangasinan, as it steps up its campaign against illegally operating Money Service Businesses (MSBs).

The central bank said the Monetary Board has disqualified Vility Foreign Exchange Services in Batangas City and H&F Foreign Exchange Services in Dagupan City from registering or obtaining a license from the BSP to engage in money services activities.

The BSP said Vility, owned by Lilian Almazan, and H&F, owned by Harlika Padilla, operated without prior registration at the BSP.

“The disqualification is consistent with Section 901-N of the BSP’s Regulatory Handbook for Nonbank Financial Institutions and is part of BSP’s efforts to combat the proliferation of illegally operating ESMs,” the regulator said.

MSB entities include remittance agent and sub-agent, remittance platform provider, e-money or electronic money issuer, and money changer or currency dealer.

The latest data shows that there are 7,214 registered MSBs operating across the country, serving as primary access points to financial services for individuals, small businesses and social betterment recipients during the COVID-19 pandemic. , especially in areas where the presence of banks is lacking.

The majority or 47.8% of MSBs are exclusively engaged in remittance business, while 38.7% offer remittance, foreign exchange and currency exchange.

Like pawnbrokers, BSP said MSBs have become essential and relevant financial service access points to reach financially unserved and underserved areas of the country, helping to achieve financial inclusion goals. of BSP, especially during the peak of COVID-19. pandemic.

BSP also ensures that MSBs are not used as a location for money laundering and terrorist financing activities. –Lawrence Agcaoili

Comments are closed.