The Securities and Exchange Commission (SEC) announced on Wednesday that it is actively collaborating with the National Privacy Commission (NPC) to strengthen protection for borrowers against abusive loan collection practices by online lending platforms (OPLs).
This move comes in response to numerous complaints filed against companies and individuals involved in these practices.
Lawyer Oliver Leonardo, director of the enforcement and investor protection department of the SEC, revealed that the discussions with NPC focus on safeguarding borrowers from OPLs that require access to their contact lists. Borrowers are bombarded with text messages about their loans when they fail to make payments.
Leonardo explained, “The government is addressing the situation by ensuring that proper procedures under the law are followed. Borrowers must give proper consent when downloading apps that request access to their contact lists.”
The SEC has also received complaints from stakeholders concerning unregistered OPLs. As a result, the commission has issued cease and desist orders against 74 OPLs. These platforms are required to register under SEC Memorandum Circular (MC) No. 18 Series of 2019.
To combat the prevalence of abusive loan schemes and verify the credibility of OPLs, Leonardo emphasized that lending companies should provide a list of the OPLs they handle on various application marketplaces such as Google Play and Apple. These platforms, in turn, should disclose the name of the principal or lending company associated with each OPL. Failure to comply may result in the deactivation of these OPLs by the online markets.
In a related development, six companies and over 30 individuals, including five Chinese nationals, faced complaints before the Department of Justice last June for violating Republic Act (RA) 9474 (Lending Company Regulation Act) and RA 11765 (Financial Products and Services Consumer Protection Act).
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