SEC Orders 6 Lending Firms to Cease Unfair Collection Practices


The Securities and Exchange Commission (SEC) has recently taken decisive action against six lending and financing companies that have been engaging in unfair debt collection practices. In an effort to protect consumers and uphold the principles of fair and respectful treatment, the SEC has issued cease and desist orders, prohibiting these companies from continuing their abusive collection methods.

In this review, CashLoanPH will delve into the details of the SEC’s actions, the companies involved, the violations committed, and the broader regulatory framework governing the financial sector.

Cease and Desist Orders

The SEC’s Financing and Lending Companies Division has issued separate cease and desist orders, specifically targeting the following companies: Surity Cash Lending Corp., Populus Lending Corporation, U-Peso.PH Lending Corporation, FESL Lending Corp., Philippine Microdot Financing Corp., and Armorak Lending, Inc.

These orders encompass not only the main companies but also their branches, extensions, satellite offices, units, and online lending platforms (OLPs). Additionally, the owners, operators, promoters, representatives, and agents associated with these companies are also bound by the orders.

Online Lending Platforms

To understand the extent of these lending companies’ operations, it is essential to examine the online lending platforms (OLPs) they employ.

Lending Company Online Platforms
Surity Cash Lending Surity Cash
Populus Lending PesoPop, PesoCow, NewCash, LuckyLoan
U-Peso.PH Lending Corporation UPeso, Pera4U, PeraLending, LoanMoto
FESL Lending Corp. Start Loan, Pondo Loan, First Cash
Philippine Microdot Financing Corp. Pautang Peso, Borrow Peso, King Loan, Loan Peso, Lendpeso Market, Loan Quick, CashCloud, Cash Star, FreePeso, Going Loans, Peso Network, Red Cash
Armorak Lending, Inc. Ayudas, WeLoan

Violations and Regulatory Framework

The lending and financing companies under scrutiny have been found to engage in abusive collection and debt recovery practices, flagrantly disregarding their responsibility to treat their clients fairly and respectfully. These reprehensible actions are in direct violation of Section 1 of SEC Memorandum Circular No. 18, Series of 2019 (MC 18), and Section 4.4 of the SEC FCPA IRR.

These regulations, derived from the Financial Products and Services Consumer Protection Act (FCPA) and its Implementing Rules and Regulations (SEC FCPA IRR), explicitly prohibit financial service providers from resorting to threats or taking any action against their clients. Furthermore, these companies are strictly prohibited from contacting individuals listed in a borrower’s contacts, unless they have been explicitly named as guarantors or co-makers.

Legal Action and Charges

The SEC’s issuance of cease and desist orders is only one facet of the enforcement efforts against these lending and financing companies. Concurrently, a criminal complaint has been filed against them with the Department of Justice, charging them with multiple violations.

The charges include infringements of Section 12(1), 12(2)(a), and 12(3)(a) of the Lending Company Regulation Act (LRCA), Section 8(d) of the FCPA, and Rule 8 Sections 4.2(B), 4.4(A), 4.4(C), 4.4(D), and 4.4(H) of the SEC FCPA IRR. These legal actions demonstrate the seriousness of the offenses committed by these companies and their consequences.

Background and Joint Operation

The investigation leading to the SEC’s actions arose from a joint operation involving the SEC Task Force on Online Lending Application and the Philippine National Police Anti-Cybercrime Group (PNP-ACG). The joint operation was initiated in response to multiple complaints lodged against several SEC-registered OLPs, specifically Loanmoto, Lendpeso, and Weloan. These OLPs were singled out due to the alleged involvement in unfair collection practices.

As a result of the collaborative efforts, the authorities arrested eight employees of Realm Shifters Business Process Outsourcing Services. It was discovered that this company served as a third-party collecting agent for various OLPs and companies, including U-Peso, Philippine Microdot, and Armorak.


The SEC’s decisive action against these lending and financing companies is a significant step towards safeguarding consumers from unfair debt collection practices. By enforcing existing regulations and ensuring the protection of consumers’ rights, the SEC is actively working to promote a fair and transparent financial landscape within the lending industry.

Through cease and desist orders, criminal charges, and collaborative operations, the SEC is sending a clear message that abusive collection methods will not be tolerated. The ultimate aim is to instill confidence and trust in the financial sector, allowing consumers to engage in lending transactions with peace of mind.

Source: MB.Com.PH

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CashLoanPH Changed status to publish 17/07/2023