SEC, gov’t agencies boost crackdown on abusive lending practices
The Securities and Exchange Commission (SEC), together with other government agencies, reminded online lending platforms (OLPs) to strictly comply with data privacy rules amid mounting complaints of abusive collection practices.
In a statement on Tuesday, the SEC, along with the Department of Information and Communications Technology (DICT) and the National Privacy Commission (NPC), said lending and financing companies must adhere to existing rules on processing borrowers’ personal data under the Data Privacy Act of 2012 and the Financial Products and Services Consumer Protection Act.
The advisory reiterated earlier SEC rules aimed at protecting borrowers, particularly SEC Memorandum Circular No. 18, Series of 2019, which prohibits unfair debt collection practices. Another is SEC Memorandum Circular No. 19, Series of 2019, which requires firms to disclose the online lending platforms they operate.
Authorities flagged persistent reports about OLPs engaging in harassment, intimidation and public shaming, as well as the unlawful use of personal data in collecting debts. They stressed that digitalization should not come at the expense of consumer protection.
Among key reminders, OLPs are barred from accessing borrowers’ contact lists and reaching out to individuals who are not declared guarantors.
Regulators said such practices constitute disproportionate processing of personal data and may lead to harassment and unfair debt collection.
Permissions
The advisory also underscored that the obligation of lenders is to ensure the secure disposal or destruction of personal data once processing is no longer necessary.
Borrowers, meanwhile, must be given the ability to revoke permissions granted to mobile applications after their purpose had been fulfilled.
Violations may expose erring firms to administrative sanctions, including fines, suspension or revocation of their authority to operate, the agencies warned.
The SEC, DICT and NPC also urged the public to remain vigilant when using online lending apps.
Borrowers were advised to download applications only from verified sources and transact only with SEC-registered entities.
Authorities said borrowers should carefully review privacy notices, avoid granting unnecessary permissions and secure the consent of guarantors before sharing their information.
Complaints about unfair debt collection may be filed with the SEC, while cases involving harassment, fraud or scams may be reported to other authorities such as the National Bureau of Investigation and the Philippine National Police, the advisory added.
