Recently, the Securities and Exchange Commission (SEC) of the Philippines took enforcement actions against two online lending companies due to violations of regulatory rules and borrower complaints. One platform, Hupan Lending Technology, Inc., has drawn attention as its lending application Magic Peso is suspected to be associated with Chinese enterprises.
Unregistered Platform Ordered to Cease Operations
According to the order issued by the Financing and Lending Companies Assessment Department (FinLenD) under the SEC, Hupan Lending Technology, Inc. was ordered to immediately cease operations of its online lending platform Magic Peso for operating without registration. The order also covers other lending platforms declared to be operated by the company, including Cashme, Sukiloan, Pesopoly, and Loan Tayo.
The SEC stated that the cease order was due to multiple complaints from borrowers about abusive collection practices by Magic Peso. The continued operation of the platform violated the suspension regulations for new online lending platforms outlined in Memorandum No. 10 of 2021.
The statement emphasized: "The Securities and Exchange Commission issued the cease order to prevent fraudulent activities and protect the public and financial consumers from losses."
Another Platform's License Revoked Due to Non-Disclosure Violations
On the same day, the SEC revoked the business license of another online lending company, Hi-Fin Lending, Inc., for failing to disclose its service provider WeWill Tech Corp. as required.
Hi-Fin Lending operated lending platforms including Peso Wallet and Credit Cash. At the end of January this year, the National Bureau of Investigation (NBI) in conjunction with the Presidential Anti-Organized Crime Commission conducted a raid on WeWill Tech's office, investigating cases involving multiple borrower complaints. The company provided collection services for Hi-Fin Lending.
The SEC pointed out that Hi-Fin Lending failed to submit a complete list of service providers as required by the Consumer Protection Act for Financial Products and Services (Republic Act No. 11765), constituting a serious violation, hence the revocation of its lending license and company registration.
This enforcement action demonstrates the Philippine regulatory authorities' increased efforts to regulate the online lending market, particularly targeting companies operating without registration and those with incomplete information disclosure, to protect consumer rights and prevent financial risks.
