SEC cancels papers of Convenience Cash
For alleged “unfair debt collection practices,” including sending funeral services to borrowers’ homes, the Securities and Exchange Commission (SEC) has canceled the corporate papers of yet another lending company.
In a July 17 order, the SEC financing and lending companies department revoked the corporate registration and secondary license of Convenience Cash Lending Corp., also known as Zada Cash and Bloom Cash.
This ends the company’s corporate life and bars it from operating as a lending firm.
According to the SEC, it had received over 600 complaints regarding Convenience Cash’s collection practices. Four of these became formal complaints.
Apart from threatening messages supposedly sent to both the borrowers and their contacts, collectors from Convenience Cash allegedly sent funeral services to the address of one borrower.
“When collecting the amount due to them, [lending companies and their third party service providers] are mandated to observe good faith, reasonable conduct and refrain from engaging in unscrupulous and untoward acts,” the SEC said in its order.
The commission found Convenience Cash to have committed four counts of violation of SEC Memorandum Circular No. 18, Series of 2019, which prohibits lending and financing companies from engaging in unfair debt collection practices.
The SEC issued show-cause letters to Convenience Cash back in April 2023 for its alleged violations.
In its verified answer submitted in May 2023, the company clarified that the collectors mentioned in the complaints were former employees “attempting to sabotage the organization’s reputation,” while some complaints “appeared to be fabricated by unknown individuals.”
Convenience Cash added that it was upgrading its systems to block former collection agents’ access to client data.
However, the SEC argued that the company had failed to “specifically deny the allegations” of the complainants and that it should be held liable for the actions of its former employees.
Additionally, Convenience Cash had confirmed the debt collection practices of the collectors, saying it had reached out to affected clients and “explained to them the predicament of the company.”
“With the above-cited admission made by [Convenience Cash], it is clear that its borrowers … suffered harassment by its former employees,” the SEC said.
