For unfair debt collection practices SEC revokes FCash Global license

DAVAO CITY- The SEC (Securities and Exchange Commission) has notified the public that it has canceled the certificate of authority or CA of FCash Global Lending Inc to operate as a lending company.

This stems for its unfair debt collection practices. FCash has had one of the most number of complaints for collection harassment since 2017, according to the SEC Corporate Governance and Finance Department (CGFD).

The CGFD found FCash liable for multiple violations of SEC Memorandum Circular No. 18, Series of 2019 (SEC MC 18), which provides for the Prohibition on Unfair Debt Collection Practices of Financing Companies and Lending Companies.

FCash Global which operates online lending platforms has made multiple attempts to collect loan payments by contacting or threatening persons other than those that the borrower has identified as guarantors or co-makers.

According to the CGFD, the company has also sent messages threatening borrowers with estafa cases before the National Bureau of Investigation and service of writ of garnishment or writ of attachment.

The company also threatened to report borrowers to their respective employers and used abusive words when communicating to them over the phone.

FCash took advantage of borrowers’ lack of awareness of legal term to force them to pay their loans.

In the first violation, the SEC on September 25, 2019 imposed a fine of P25,000 against the company, another fine was meted on September 26, 2019.

On December 12, 2019, FCash was formally charged for its third violation of SEC MC 18.

SEC Memorandum Circular 18, which took effect on September 8, 2019, was enforced in response to several complaints for unreasonable, abusive, and unfair practices that lending and financing companies used in order to collect debt from borrowers.

FCash in its defense said it should not be charged with violation of SEC MC 18 as loan transactions were consummated before the circular became effective.

However SEC CGFD said that FCash was bound to follow the SEC MC 18 at the time of its effect with respect to new and existing loan accounts, insofar as the latter remain pending and demandable.

“In any case, even before the effectivity of SEC MC 18, there was neither right nor obligation on the respondent’s part to harass or employ abusive tactics in conducting its collection. It is basic that in the exercise of rights and performance of duties, one must act with justice, give everyone his due and observe honesty and good faith.” Read the decision of the SEC CGFD.

The SEC has remained steadfast in stamping out abusive and predatory lending and financing companies, while enjoining the public to be cautious and mindful of their transactions with entities representing themselves as lending or financing companies. (PIA RG Alama with reports from SEC)

Source: Philippines Information Agency (pia.gov.ph)