Threats, Intimidation and Abusive Language: SEC Revokes License of Lending Company
Lending company Super Cash has been stripped of its license to operate for alleged unfair debt collection practices. According to the Corporate Governance and Finance Department (CGFD) of the Securities and Exchange Commission (SEC), the company threatened borrowers with shaming on social media through the publication of their loan and personal details. The company also used profane and abusive language to collect debts and reportedly told clients that they would be charged with estafa and theft charges, and blacklisted with the National Bureau of Investigation.
According to the SEC, Super Cash—through its online lending platforms Super Cash, Cash Porter, and Loan Bee—was liable for nine violations of SEC Memorandum Circular No. 18, Series of 2019 (SEC MC 18), which provides for the Prohibition on Unfair Debt Collection Practices of Financing Companies and Lending Companies.
“Worse, in one of the screen captures submitted by one of the complainants, messages showing threats of inflicting grave physical harm upon the person of the complainant could be seen,” the CGFD added. “These unfair collection practices are all too obnoxious to ignore.”
A third violation of SEC MC 18 merits the imposition of either a monetary fine, suspension, or revocation of the company’s CA, depending on the facts, circumstances, and gravity of the case, an SEC news release said.
“[T]he revocation of respondent’s CA is not merely appropriate, but rather necessitated by the gravity and number of its offenses,” the CGFD said.
“We respect the right of lending and financing companies to formulate and adopt certain strategies to effectively collect debts and secure their profitability,” SEC Commissioner Kelvin Lester K. Lee said. “However, harassment and other abusive or predatory practices will never be acceptable and tolerated. As we pursue erring lending and financing companies, we also advise the public to be cautious and mindful of their transactions with entities representing themselves as such.”
SEC MC 18 took effect on September 8, 2019, as part of the Commission’s response to several complaints for unreasonable, abusive, and unfair practices that lending and financing companies used in order to collect debt from borrowers.
This isn’t the first time that the SEC has revoked the certificate of authority to operate of a lending company. Earlier this year, it also stripped the CA of FCash Global Lending, Inc., which previously operated through online lending platforms Fcash, Fast Cash and Fast Cash Loan, for committing similarly unfair debt collection practices. The company has had one of the most number of complaints for collection harassment since 2017, according to the CGFD.
At least four online lending applications (CashAB, CashOcean, KwikPeso, and Little Cash) were also ordered to cease operations for lack of authority to operate as a lending or financing company. The online lending operators were also found to have employed abusive collection practices.