SEC stops ops of 2 lending firms
The Securities and Exchange Commission (SEC) has ordered two lending companies to stop operating due to alleged “abusive collection practices,” saying that it had to protect investors from fraud and harm.
In separate cease and desist orders dated June 24, the SEC Financial and Lending Companies Department (FinLend) said it had received several complaints about “unfair debt collection practices” of Bravo Zulo Romeo Lending Corp. (BZR Lending) and Magic Peso.
BZR Lending owns Magic Peso, which was found to have been operating despite the SEC’s moratorium on new online lending platforms (OLPs) imposed in 2021.
Under the commission’s Memorandum Circular No. 10, Series of 2021, only OLPs registered as of Nov. 2, 2021 were allowed to continue operating after the SEC received “numerous complaints” about the supposed violations of companies in this industry.
Magic Peso was not listed among the OLPs allowed to operate.
The SEC FinLend pointed out that in operating an unregistered OLP, BZR Lending placed borrowers “at risk of experiencing abusive collection practices, high interest rates and violation of their data privacy rights.”
“On account of [BZR Lending’s] continuing operation of Magic Peso, the commission holds that the issuance of a [cease and desist order] is warranted in the instant case, not only to penalize the respondent but also to prevent fraud, injury or harm to the public and financial consumers who are at the respondent’s mercy,” the corporate watchdog said in its order.
Magic Peso and its owners, operators, promoters, representatives and agents were slapped with the same terms.
In May, the SEC also issued a cease and desist order against Hupan Lending Technology Inc., another operator of Magic Peso.
The commission has recently been intensifying its crackdown on fraudulent and delinquent lending firms to protect investors.
It has so far canceled the licenses of 401 lending companies for failing to submit documentary requirements.
