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SEC Philippines takes down more illegal lenders, warns of new penalties under FCPA
The Securities and Exchange Commission (SEC) continues to take down more entities engaged in unauthorized lending activities, warning them of new penalties under Republic Act No. 11765, otherwise known as the Financial Products and Services Consumer Protection Act (FCPA).
In a joint operation on May 16, the combined forces of the SEC Enforcement and Investor Protection Department (EIPD) and Philippine National Police Anti- Cybercrime Group (PNP-ACG) successfully implemented a warrant to search, seize and examine computer data and other relevant information in the office of online lending operator Realm Shifters BPO Services/FESL BPO Services in Pasig City.
The operation also involved forces of the Eastern Police District Mobile Force Battalion, PNP Intelligence Group, and the Special Weapons and Tactics Philippines (SWAT).
The Pasig City Regional Trial Court Branch 159 issued the search warrant against Salvador Jennifer Mangubat, registered owner of Realm Shifters/FESL, and other managers, supervisors, team leaders, operators and occupants of the office for misuse of device penalized under Section 4(a)(5)(i)(ii) of Republic Act No. 10275, or the Cybercrime Prevention Act of 2012.
The joint operation resulted in the arrest of eight individuals identified as operators, managers, employees, and agents of Realm Shifters/FESL.
The SEC has been receiving numerous complaints against online lending applications for various violations of RA No. 9474, or the Lending Company Regulation Act, and for abusive debt collection practices in violation of SEC Memorandum Circular No. 18, Series of 2019, which provides for the Prohibition on Unfair Debt Collection Practices of Financing Companies and Lending Companies.
The SEC warned that those who engage in abusive debt collection practices may now be criminally prosecuted for violation of Section 8(d) of the FCPA.
Rule 8, Section 4.4 of the recently issued SEC FCPA Rules and Regulations (IRR) states that financial service providers and their collection agencies, counsels and other authorized third-party representatives are prohibited from employing abusive collection or debt recovery practices against their financial consumers.
Rule 15, Section 1 of the SEC FCPA IRR further provides that any person who willfully violates its provisions shall be penalized with a maximum fine of P2 million or imprisonment of five years, or both.
Additionally, financial services providers, including entities engaged in lending and financing, are required to respect the privacy and protect the data of their financial consumers. Such entities are required to inform financial consumers if their data will be shared to third parties.
To see the list of licensed lending and financing companies and their registration status, please visit the Lending and Financing Companies corner on the SEC website at https://www.sec.gov.ph/lending-companies-and-financing-companies-2/lending-companies-and-financing-companies/.
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ABOUT THE BLOGGER
Hi, I'm Ralph Gregore Masalihit!
An RFP Graduate (Registered Financial Planner Institute - Philippines).
A Personal Finance Advocate. An I.T. by Profession. An Investor. Business Minded. An Introvert. A Photography Enthusiast. A Travel and Personal Finance Blogger (Lakbay Diwa and Kuripot Pinoy).
Currently, I'm working my way toward time and financial freedom.