Iris Gonzales (The Philippine Star) – July 12, 2021 – 12:00 am
MANILA, Philippines – The Securities and Exchange Commission (SEC) has widened its net on misguided loan companies, revoking another company’s license.
He revoked the Certificate of Authorization from Familyhan Credit Corp. to operate as a loan company after the company engaged in unfair debt collection practices and failed to disclose the true cost of loans to borrowers.
SEC Corporate Governance and Finance Department (CGFD) Has Found Familyhan Responsible for Three Violations of SEC Circular 18, Which Bans Unfair Debt Collection Practices by Finance and Loan Companies .
Familyhan also allegedly committed eight violations of Republic Law 3765 or the Loan Truth Act (TILA).
According to the SEC, Familyhan contacted people on the debtor’s contact list other than those named as guarantors or co-creators of the loan agreement.
“Notwithstanding the borrower’s consent, contacting people on the borrower’s contact list other than those who have been named as guarantors or co-creators is also an unfair debt collection practice,” the SEC said. .
Unfair debt practices aside, Familyhan failed to disclose the net proceeds of the loan to its borrowers.
“It is clear that the net proceeds of the loan is one of the minimum information that must be disclosed by a creditor to its borrower,” the SEC said.
Philippine regulators require lenders to disclose loan terms to all types of borrowers, including the total amount to be financed, finance charges, net loan proceeds, and the percentage of finance charges over the total amount to be financed, before the closing of the transaction.
Familyhan filed a petition for reconsideration of the SEC’s revocation order, but it was dismissed for lack of merit.
The SEC said it continues to monitor loan and finance companies for their compliance with applicable laws, rules and regulations.
So far, the commission has canceled the licenses of 35 finance / loan companies due to various violations of applicable rules and regulations.
The SEC also revoked the certificate of registration of a total of 2,081 loan companies for their failure to obtain the required authority as required by law.