THE Securities and Exchange Commission (SEC) has fined Fast Coin Lending Corp. P1.1 million for unfair debt collection practices, charging rates of interest beyond regulatory limits, and violating disclosure requirements.
In an announcement on Thursday, the SEC said its Financing and Lending Firms Department (FLCD) found Fast Coin chargeable for violating SEC Memorandum Circular (MC) No. 18, Series of 2019, which prohibits unfair debt collection practices, and MC No. 3, Series of 2022, which sets rate of interest and fee ceilings for lending and financing corporations and their online lending platforms.
The FLCD also found the corporate in violation of Republic Act No. 3765, or the Truth in Lending Act (TILA), SEC MC No. 7, Series of 2011, and Rule 8(c)(iii) of the implementing rules and regulations of Republic Act No. 9474, or the Lending Company Regulation Act.
The order stemmed from a grievance filed by a borrower who alleged that Fast Coin used harassing text messages to gather loan payments. The borrower said the loan was obtained through the corporate’s CashGuard online lending application, which generated multiple loan accounts under eight loan products.
In response to the FLCD’s investigation, Fast Coin violated MC No. 18 through the use of public humiliation, disclosing borrowers’ personal information, and interesting in other collection practices prohibited under the circular.
The investigation also found that deductions classified as “management fees,” when considered with the actual money proceeds received by borrowers, resulted in effective rates of interest exceeding the SEC’s 15% monthly ceiling, in violation of MC No. 3.
The FLCD further found that Fast Coin failed to offer borrowers with documents required under the TILA and MC No. 7, including loan agreements, disclosure statements, and amortization schedules.
It also found that the corporate didn’t comply with the SEC’s directives to submit documents and data relevant to the investigation, in violation of the implementing rules and regulations of the Lending Company Regulation Act.
“Lending corporations operate in a public interest industry and are expected to conduct their business with transparency, fairness, accountability, and strict compliance with the regulatory framework established to guard financial consumers,” the order read.
“The violations established on this case display a disregard for these obligations and warrant the imposition of the suitable administrative sanctions,” it added.
Fast Coin Lending Corp. didn’t immediately reply to an e-mailed request for comment. — Alexandria Grace C. Magno