SEC orders GCash unit copycat to stop ops

The Securities and Exchange Commission (SEC) has ordered Fuse Lending Inc. to immediately stop operating due to the supposed “malicious use” of its corporate name and operating a lending business without securing the needed licenses.

In a July 31 order, the SEC pointed out that Fuse Lending, which is exactly the former corporate name of GCash’s official lending arm Fuse Financing Inc., was not registered as a corporation, partnership or one-person corporation.

It has likewise not secured a secondary license to operate as a lending company, resulting in the SEC’s cease and desist order against the company, its owners, operators and agents.

Under Republic Act No. 9474, or the Lending Company Regulation Act, no lending company can operate without the SEC’s authorization. Violators may be fined at least P10,000 or imprisoned for up to 10 years, or both.

The issuance came after Fuse Financing flagged a “suspicious website” that allegedly used its former corporate name.

Fuse Financing alleged that Fuse Lending had been operating a fraudulent website that “poses potential risk to the public and threatens its legitimate operations.”

Based on its report submitted to the SEC, Fuse Financing noted that the website of Fuse Lending, due to its name, “may attempt to impersonate legitimate financial services by using a similar layout or branding, misleading users.”

According to Fuse Financing, the GCash mobile application includes required regulatory disclosures: company registration number, certificate of authority number and a statement confirming it is regulated by the SEC.

Meanwhile, Fuse Lending’s website only included its company name and address, Fuse Financing pointed out, adding that the missing disclosures were a “strong indication of the site’s illegitimacy.”

While the GCash app features “various security measures,” Fuse Lending supposedly collected know-your-customer information directly through its website, with vague details about loan application procedures.

Under these circumstances, the SEC said a cease and desist order was warranted.