SEC issues stop order against illegal online lenders

The Securities and Exchange Commission (SEC) has issued another cease and desist order against seven other online lending entities conducting business without the necessary license from the commission.

The Commission En Banc issued a stop order dated February 8 against PesoBee, Peso T-Safe Online Cash, RushLoan, SkyMart, SpendCash, Tapa and WithU.

None of the entities have registered with the SEC. They also do not have the certificate of authorization to operate as a loan/finance company.

Under Republic Act No. 9474 or the Loan Companies Regulation Act of 2007, or LCRA, individuals or corporations that operate as loan companies are required to register as companies and obtain SEC approval to operate.

“[T]The Commission believes that the continued operation of online lending operators is a clear breach of the law and should be sanctioned under it. [LCRA] because it engages in or carries on any lending activity without the required authorization from the Commission,” Commission En Banc said.

The SEC found that the seven unregistered and unauthorized online lending operators imposed onerous and unreasonable terms on debtors and charged them high interest rates. These entities have also used abusive and defamatory language in their dealings with debtors.

Until they are able to register and obtain clearance from the SEC, the seven entities are not permitted to operate and promote their lending or financing activities.

The cease and desist order also applies to agents, representatives, promoters and owners and operators of the PesoBee, Peso T-Safe Online Cash, RushLoan, SkyMart, SpendCash, Tapa and WithU hosting sites.

The commission ordered 73 online lending apps to stop working for not having the authority to operate as a lending or finance company.

As of Feb. 15, the SEC said it had revoked the licenses of 36 finance or loan companies due to violations of applicable rules and regulations.

Meanwhile, the SEC also revoked the certificate of registration of 2,081 loan companies for not obtaining the required certificate of authority. — Keren Concepcion G. Valmonte

Note: The story was updated on February 16, 2022 to remove Cashwill from the list of illegal online lending transactions based on a correction from the Securities and Exchange Commission. Only PesoBee, Peso T-Safe Online Cash, RushLoan, SkyMart, SpendCash, Tapa and WithU were included in the cease and desist commission order.

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