The Securities and Exchange Commission (SEC) has taken decisive action against two lending firms in the Philippines, imposing significant fines for violations related to unfair debt collection practices and misleading loan agreements. This comes as a crucial step towards regulating the lending industry and protecting consumers from unscrupulous practices.
The first firm, Link Credit Lending Investors Inc., was ordered to pay a fine of P1 million. The SEC found the company, which operates under the names iPeso and Pesoin, liable for four counts of violating SEC Memorandum Circular No. 18 Series of 2019. This circular prohibits unfair debt collection practices. Between September 2022 and March 2023, over 200 complaints were filed against Link Credit Lending, four of which led to the SEC’s order. The complaints detail instances where the firm resorted to sending insulting and threatening messages to borrowers, asserting that they would contact their emergency contacts and co-workers for loan collection.
The SEC reiterated the guidelines under Memorandum Circular No. 18, which allows lending companies to pursue debt collection through reasonable and legally permissible means while maintaining good faith and proper conduct. The commission has warned Link Credit Lending that any future violations will result in more severe penalties.
The second firm, LHL Online Lending Inc., also faced repercussions, being fined P129,000 for providing misleading information in its loan agreements. This violation pertains to the Truth in Lending Act (TILA), implemented by SEC Memorandum Circular No. 7 Series of 2011. It highlights the importance of transparency and accurate representation of loan conditions to borrowers, aiming to foster trust in the lending process.
Both cases underscore the SEC’s commitment to enhancing the integrity of the financial lending sector in the Philippines. The actions taken not only protect consumers from harmful practices but also promote a fair and competitive environment for financial services. With these measures, the SEC aims to ensure that lending firms operate within the bounds of the law, prioritizing consumer rights and promoting ethical business standards.