SEC flags three online lending firms, warns public of Leefire

THE Securities and Exchange Commission (SEC) warned the public about the illegal operations of three online lending firms and an unauthorized investment firm.

In an advisory on Thursday, the SEC ordered the three online lending operators to stop their activities without the necessary authorization from the commission, and to stop their abusive collection practices.

The commission en banc in an order issued April 26 directed Golden Cash, Help Cash, and Grace Cash to immediately cease and desist from engaging in, carrying out, promoting and facilitating any lending activity or transaction until they have secured the necessary registration and license from the commission.

“[T]he commission finds that the continued operations of Golden Cash, Help Cash, and Grace Cash constitute a clear violation of, and should be penalized,” the SEC said, adding that they engage and carry out a lending business without the required license from the regulator.

The commission also ordered the online lending operators to stop offering and advertising their lending business through the internet or any other media, and to delete materials involving such.

The SEC issued the order after finding that the three lending companies are not registered as a corporation with the commission.

“Further findings by the SEC Enforcement and Investor Protection Department (EIPD) revealed that the online lending operators have been employing unfair collection practices,” according to the advisory.

The EIPD reported that the online lending operators have been harassing, threatening, publicly humiliating their respective borrowers, and imposing hidden charges and excessive processing fees.

“The acts of these unregistered online lending operators in illegally offering and providing loans to the public, charging high interest rates, and subjecting its debtors to unfair treatment through abusive and even libelous language in collecting the loaned amount… have no place in a society that is governed by and faithfully adheres to positive laws,” the SEC said.

In a separate advisory, the SEC warned the public about Leefire Philippines, an unauthorized investment firm, for enticing the public to invest in the company without license or registration.

The commission reported that the entity was not registered as a corporation or partnership and was not authorized to solicit investments, since it did not secure prior registration or license.

“Further, since Leefire is also promising its investors to receive its native cryptocurrency ‘LFC coin’ in an apparent Initial Coin Offering (ICO), it is apt to once again remind the public that an ICO is the first sale and issuance of a new virtual currency to the public usually for the purpose of raising capital for startup companies or funding independent projects,” the SEC said. 

The commission said the unauthorized firm was seeking to use the money it gathered from the public to fund its purported project on the promise of profits.

“Based on the contents of posts found online, Leefire is offering investments to the public through a mobile application available in Google Play Store. Signing up through a personal mobile number will entitle investors to receive a cash bonus of P120 which can be used to buy corresponding level of goods,” the advisory read.

The SEC said that any salesmen, brokers, dealers or agents involved in selling or convincing people to invest in Leefire may be prosecuted and held criminally liable.

Penalties include a maximum fine of P5 million or up to 21 years of imprisonment.

“The public is advised not to invest or stop investing in any investment scheme being offered by any individual or group of persons allegedly for or on behalf of Leefire Philippines, and to exercise caution in dealing with any individuals or group of persons soliciting investments for and on behalf of it,” the commission added. — Luisa Maria Jacinta C. Jocson

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