SENATORS have called out the Securities and Exchange and Commission (SEC) over its Memorandum Circular 18 Series of 2019 allowing lending and financing companies to share the information of their clients to collection agencies that may lead to borrowers being threatened.
The Senate Subcommittee on Banks, Financial Institutions and Currencies is investigating the rampant unfair debt collection practices of lending companies.
According to Presidential Anti-Organized Crime Commission (PAOCC) spokesperson Winston Casio, they have received about 3,000 complaints from victims saying they were threatened after borrowing from online lending applications (OLA) and failing to pay on time — some received fake warrants of arrest, there were those whose faces were put in pornographic videos, while others received funeral services.
Committee chairperson Sen. Raffy Tulfo asked SEC: “Why would you allow OLA sharing private information of their clients to collection agency which is a different animal?”
Sen. Sherwin Gatchalian pointed out the violation of a person’s privacy.
“Maling-mali iyon eh,” he said. “It’s a clear violation ng privacy laws natin kasi ‘yung information ko na ginamit ko mag-apply, naipasa sa ibang entity na wala namang kinalaman sa akin… That practice, that modus should be stopped.”
“Baguhin niyo itong circular order ninyo,” Tulfo also told the SEC.
Atty. Kenneth Joy Quimio, SEC’s OIC Director for the Financing and Lending Companies Department, said they will take action on the matter.
Casio said they are in the process of case build up with SEC and the National Bureau of Investigation (NBI) against abusive OLAs.
STRICTER PENALTIES, CLEAN LIST
Gatchalian also wants stricter penalties against OLAs after finding out that all 74 convicted individuals in various cases only paid a fine.
“Isama niyo na sa inyong due diligence at TWG (technical working group), harsher penalties and prison time. And this goes to all financial crimes. Dahil kung walang imprisonment walang natatakot eh,” Gatchalian said.
Quimio said there is imprisonment under the law but judges choose to merely impose a fine.
Tulfo, meanwhile, told SEC to clean up its list of OLAs because some financing and lending companies allegedly put up an OLA after the SEC issued a moratorium in 2021.
SEC said it will comply.
It is also in the process of visiting the Lending Company Act of 2007 and Financing Company Act of 1998 which only require a capitalization of P1 million for lending companies and P10 million for financing companies.
Quimio assured they have done several measures to address problems with OLAs such as requiring financing and lending companies to register with the Credit Information Corporation for monitoring, and providing financial literacy for borrowers.
SEC also said it writes to Meta, Apple Store and Google Store to report fly-by-night OLAs. (ABS-CBN News)
