🚫 SEC Revokes Convenience Cash Lending License Amid Unfair Collection Scandal

The Securities and Exchange Commission (SEC) of the Philippines has taken a strong stance against predatory lending practices once again, officially revoking both the corporate registration and lending license of Convenience Cash Lending Corp. The move came after mounting consumer complaints and substantial evidence of unethical debt collection activities. Known to the public under the aliases Zada Cash and Bloom Cash, the company is now permanently barred from operating within the legal boundaries of the Philippine lending sector.

This action marks a significant win for consumer protection advocates and reflects the SEC’s unwavering commitment to maintaining fairness and transparency in the financial services industry. Let’s explore in detail what led to this revocation, what violations occurred, and what this means for borrowers and the online lending landscape in the country.

🔎 Who is Convenience Cash Lending Corp.?

Convenience Cash Lending Corp. is a registered lending company that operated digital loan services under the brand names Zada Cash and Bloom Cash. These platforms offered fast cash loans online, primarily targeting Filipinos looking for urgent financial support. Like many other digital lenders, they claimed to provide easy approval, minimal documentation, and same-day disbursement – all appealing features for cash-strapped borrowers.

However, behind the scenes, the company allegedly engaged in practices that violated consumer rights and privacy – crossing ethical boundaries and disregarding regulatory requirements.

📌 Why the SEC Took Action: A Timeline of Violations

🗓️ July 17: SEC Drops the Hammer

On July 17, the SEC’s Financing and Lending Companies Division (FinLend) issued an order of revocation that formally canceled the company’s certificate of incorporation and revoked its certificate of authority to operate as a lending business. This move effectively strips Convenience Cash of any legal right to continue offering loans.

📜 Violations of SEC Memorandum Circular No. 18 (Series of 2019)

Convenience Cash Lending Corp. was found guilty of violating SEC Memorandum Circular No. 18 not once, but four times. This circular was created to prohibit unfair debt collection practices, ensuring that all lending companies uphold ethical standards when dealing with delinquent borrowers.

The violations included:

• Sending harassing or threatening messages to borrowers
• Public shaming by contacting friends, family, and colleagues of borrowers
• Sending funeral services to a borrower’s address – a shocking act meant to intimidate

According to the SEC, over 600 complaints were filed by affected borrowers. These complaints were not anonymous rants – they came with concrete, verifiable evidence, prompting the SEC to investigate and ultimately take disciplinary action.

📢 What the SEC Said: A Firm Reminder to Lenders

In its revocation order, FinLend emphasized that lending firms must act in good faith, treat borrowers with dignity and fairness, and refrain from unscrupulous acts.

Here’s a portion of their official statement:

“Lending companies are mandated to observe good faith, reasonable conduct, and refrain from engaging in unscrupulous and untoward acts when collecting debts.”

This isn’t just a slap on the wrist. It’s a clear warning to all other digital lenders: cross the line, and you’ll lose your license.

🚫 Prior Warning: Cease and Desist Order in May

Before the July revocation, the SEC had already issued a cease and desist order to Convenience Cash on May 27 for a separate violation: failure to register with the Credit Information Corporation (CIC) – a requirement under the Financial Products and Services Consumer Protection Act.

The CIC plays a vital role in maintaining financial transparency and ensuring borrowers’ credit histories are properly recorded and accessible across financial institutions. Skipping registration with the CIC is a serious non-compliance, as it blocks the financial ecosystem from assessing borrowers’ creditworthiness fairly.

😡 Borrowers Share Harrowing Experiences

Numerous borrowers who filed complaints described extreme emotional distress caused by the company’s tactics. Some said they received threats, while others were publicly humiliated by messages sent to coworkers or family.

In the most extreme case, a borrower received an unexpected delivery – a funeral service package sent to their home, implying the borrower would soon die or should be prepared for death if they didn’t pay up. This disturbing scare tactic is not only unethical but potentially illegal under laws protecting mental health and safety.

Such behavior violates basic consumer protection laws and underscores why stricter regulation in the online lending space is urgently needed.

📚 SEC Memorandum Circular No. 18: What Does It Prohibit?

For context, here are some of the prohibited collection practices under SEC Memo Circular No. 18, Series of 2019:

• Harassment or threats
• Use of obscene language
• Publishing or sharing the borrower’s debts with third parties
• Contacting persons in the borrower’s contact list without permission
• Misrepresenting legal actions, like fake court notices or warrants
• Stalking or visiting the borrower’s home or office uninvited

The SEC created this regulation to protect the dignity and privacy of borrowers, especially in an environment where digital lending apps can easily abuse personal data.

🧠 What Borrowers Can Learn from This

This case serves as a wakeup call for borrowers and lenders alike.

✅ For Borrowers:

• Report abusive lenders to the SEC immediately.
• Read reviews and check for SEC registration before borrowing.
• Be cautious when sharing personal contacts with apps.
• Know your rights – you should not be harassed or threatened for missing payments.

⚠️ For Lending Companies:

• Strictly follow consumer protection laws.
• Train collection agents in ethical communication.
• Ensure full compliance with SEC and CIC regulations.
• Operate with transparency, compassion, and accountability.

🔒 How to Verify if a Lending App is Legal

To avoid falling into traps like Zada Cash or Bloom Cash, consumers should verify a lender’s legitimacy by:

1. Searching the SEC Lending Companies List via the official SEC website
2. Confirming if the lender is registered with the CIC
3. Checking for public complaints or sanctions
4. Reading app store reviews carefully

🌐 The Future of Online Lending in the Philippines

Digital lending remains a powerful tool to boost financial inclusion, especially for unbanked populations. But its potential is threatened by rogue operators exploiting vulnerable borrowers.

The SEC’s decisive action against Convenience Cash Lending Corp. signals a renewed effort to clean up the industry. With stronger regulations, public education, and transparent oversight, the Philippine lending ecosystem can move toward a safer, fairer digital finance future. 🔒💸

✅ Final Thoughts

The fall of Zada Cash and Bloom Cash is a stark reminder: borrowers are not powerless, and regulators are watching. If you’re facing harassment from any lending app, don’t stay silent. Report, document, and stand up for your rights.

The SEC’s swift revocation of Convenience Cash Lending Corp.’s license sends a powerful message – there is no place for intimidation and abuse in responsible lending.

Source: FintechNews