How to File a Complaint Against Abusive Online Lending Applications (OLA) at SEC?
How to File a Complaint Against abusive Online Lending Applications (OLA) at SEC?
By: Peter Breboneria II
What are the issues that you can raise to SEC related to OLA?
1. Unfair and unreasonable charges.
Section 7 of R.A. No. 9474 on ‘Amounts and Charges on Loans’ states that “a lending company may grant loans in such amounts and reasonable interest rates and charges as may be agreed upon between the lending company and the debtor”
This is a violation of Republic Act No. 9474- “Lending Company Regulation Act of 2007”
Note: I understand many Filipinos allowed themselves to be charged with 20% or more Interest charges: “Kapit sa Patalim”. We need a law that will protect the poor and underprivileged.
2. 5/6 describes as 20% or more interest charges in a month.
The Supreme Court already ruled that imposition of usurious interest rates such as “5-6 money lending” is illegal.
This is also a violation of Republic Act No. 9474- “Lending Company Regulation Act of 2007”
3.Unfair Debt Collection Practices
and disclosure or publication of the names and other personal information of borrowers.
SEC issued Memorandum Circular No. 18, Series of 2019, entitled as “Prohibition on Unfair Debt Collection Practices of Financing Companies and Lending Companies.”
4. Sending out text blasts to the entire contact list of the borrower
This is a violation of the Data Privacy Act of 2012 and SEC issued Memorandum Circular No. 18, Series of 2019
What you need to do before you file a complaint?
Send a complaint to the loan app company via text, phone call, and email before escalating to SEC. Give them 10 days to reply.
Note: Please do not forget to screenshot the email and text that you tried to reach out to them. You may also record the conversation on the phone by downloading an app at play store: CallApp: Caller ID, Call Blocker & Recording Calls.
If you are not happy with the resolution of the agent of the lending company, you may request for the manager. Please do not forget to record the calls.
If not happy with the manager’s resolution, you may start filing a formal complaint to SEC.
Important Reminders:
IMPORTANT: Only registered Lending Companies and Financing Companies with Certificates of Authority to Operate as a Lending/Financing Company (CA) may become respondent/s to your complaint. You may check the SEC- registered online lending platforms at https://utakhenyo.com/list-of-sec-registered-online-lending-applications-ola/ or https://www.sec.gov.ph/lending-companies-and-financing-companies-2/list-of-registered-online-lending-platforms/
For complaints against individuals/companies engaging in lending activities without Certificate of Authority(CA), please send your email to Enforcement and Investor Protection Department at epd@sec.gov.ph.
Complaints that are insufficient in form and in substance may cause the outright dismissal of your complaint. To avoid that:
1. Always fill out the Complaint Form completely and accurately.
2. Do not forget to attach all relevant documents/evidence/proof to support your complaint.
3. Submit ONE COMPLAINT FORM PER RESPONDENT COMPANY.
4. Provide us with a valid government issued I.D.
5. Do not forget to provide evidence/proof that you have exhausted all remedies against the company concerned before filing your complaint with the SEC.
How to file a formal complaint?
1. Download the Complaint Form here.
2. Always fill out the completely and accurately.
3. Do not forget to attach all your evidence/proof to support your complaint.
4. Submit ONE COMPLAINT FORM PER RESPONDENT COMPANY.
5. Provide us with a valid government issued I.D.
After accomplishing the Complaint Form with all the requirements, you may file your complaint through the following:
1.Walk-in/Personal filing
You visit our office at Ground Floor, North Wing Hall, Secretariat Building, PICC Complex, Vicente Sotto Street, 1307 Pasay City, Monday through Friday from 8:00 am to 5:00 pm.
Bring an accomplished Complaint Form, with the following:
a. Photocopy of your valid government-issued I.D.
b. Supporting evidence/documents such as the disclosure statement, amortization schedule, receipts, promissory notes, and other relevant documents in connection with your loan transaction that will help us evaluate your complaint.
2.E-mail
You may send an accomplished Complaint Form at cgfd_md@sec.gov.ph, and attach a scanned copy of your valid government-issued I.D. and supporting evidence/documents such as disclosure statement, amortization schedule, receipts, promissory notes, and other relevant documents in connection with your loan transaction that will help us evaluate your complaint.
| REMINDER: Use the following format in the subject head: COMPLETE NAME_RESPONDENT COMPANY_SUBJECT OF COMPLAINT |
| (ex: JUAN DELA CRUZ_ABC123 LENDING COMPANY_DISCLOSURE STATEMENT VIOLATION) |
What happens after you file a complaint?
Upon receipt of the accomplished Complaint Form, SEC will evaluate it together with all the evidence/documents you attached to support it.
A copy of your complaint will be sent to the financing company or lending company for its answer/comment. They are given ten (10) days from receipt to give their answer/comment.
SEC will evaluate the financing company/lending company’s answer/comment and may do either of the following:
– Require you to file your Reply to the financing company/lending company’s answer/comment
– Close and terminate the complaint if, in their assessment, the issue has been resolved.
If SEC finds sufficient grounds that warrant the commencement of an administrative action against the financing company/lending company, SEC will issue a Formal Charge and proceed against the financing company/lending company in accordance with the 2016 Rules of Procedure of the Securities and Exchange Commission.
References
1.Frequently Asked Questions – Securities and Exchange Commission. (n.d.). Retrieved September 12, 2021, from https://www.sec.gov.ph/lending-companies-and-financing-companies-2/frequently-asked-questions/
2.Unconscionable lending rates | Inquirer Opinion. (n.d.). Retrieved September 12, 2021, from https://opinion.inquirer.net/125013/unconscionable-lending-rates
3.Complaints – Securities and Exchange Commission. (n.d.). Retrieved September 12, 2021, from https://www.sec.gov.ph/lending-companies-and-financing-companies-2/complaints/
4.Lenders Beware: The Crackdown On Illegal Online Cash Companies – ACCRALAW. (n.d.). Retrieved September 12, 2021, from https://accralaw.com/lenders-beware-the-crackdown-on-illegal-online-cash-companies/
About the Writer
Peter Dadis Breboneria II (Formerly Peter Reganit Breboneria II) is the founder of the International Center for Youth Development (ICYD) and the program author/ developer of the Philippines first internet-based Alternative Learning System and Utak Henyo Program of the Department of Education featured by GMA News & Public Affairs and ABS-CBN and MOA signed by Department of Education, Voice of the Youth Network, Junior Chamber International (JCI), and the Philippine Music and the Arts. You may visit his website at www.peterbreboneria.com
