THE Securities and Exchange Commission (SEC) has imposed a P1.1-million fine on Fast Coin Lending Corp. for engaging in unfair debt collection practices, charging excessive interest rates and violating disclosure requirements.
In a June 30 order, the SEC's Financing and Lending Companies Department said that it had found the company liable for breaching rules that prohibit abusive collection practices, cap interest rates and require lenders to provide borrowers with complete loan disclosures.
The case stemmed from a complaint filed by a borrower who alleged that Fast Coin, through its online lending application CashGuard, harassed her through text messages while collecting loan payments.
She also claimed that a single loan application resulted in multiple loan accounts covering eight loan products.
The SEC said its investigation found that the lender resorted to public humiliation, unauthorized disclosure of personal information and other forms of intimidation in collecting the borrower's obligations, in violation of rules on fair debt collection.
The regulator also found that fees imposed by Fast Coin, including those labeled as "management fees," effectively pushed borrowing costs beyond the SEC's 15-percent monthly interest ceiling for lending and financing companies.
The company also failed to provide the borrower with required documents such as loan agreements, disclosure statements and amortization schedules, violating the Truth in Lending Act and related SEC regulations.
Fast Coin was also cited failing to comply with the SEC directives to submit documents and information during the investigation.
"Lending companies 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 protect financial consumers," the order read.
"The violations established in this case demonstrate a disregard for these obligations and warrant the imposition of the appropriate administrative sanctions," it added.
