THE Securities and Exchange Commission (SEC) has ordered Credladder to immediately stop its lending operations after it continued to offer loans despite an earlier warning.
The regulator also warned the public against transacting with Credladder after the SEC’s Enforcement and Investor Protection Department (EIPD) issued a cease-and-desist order against Credladder on Sept. 15.
The regulator had issued an advisory against Credladder on June 10, which was posted on the SEC website on June 19, which stated that Credladder and Credladder: Credit Insights did not appear in the commission’s database and were not included in its list of recorded online lending platforms (OLPs).
Despite the advisory, the platform continued operating, the SEC said.
The commission said it received reports that Credladder was imposing excessive interest charges and sending humiliating and/or threatening messages to debtors. It also reported that Credladder was using FlexiFund, FundXpress, QuickPesa and Paymatic as remittance agents for its lending activities.
The EIPD determined that the reported sending of humiliating and/or threatening messages to debtors constituted abusive collection or debt recovery practices prohibited under the Financial Products and Services Consumer Protection Act.
The SEC further found that Credladder was advertising its lending activities on Facebook and that its online lending application was available for download on Google Play.
Verification with the Department of Trade and Industry’s Business Name Registration System also showed that Credladder was not listed, the order stated.
The SEC said that operating a lending business without the required authority constituted an illegal activity under Republic Act 9474, or the Lending Company Regulation Act of 2007.
Credladder’s continued operation also violated SEC Memorandum Circular 19, Series of 2019, which requires the disclosure of OLPs, and Memorandum Circular 10, Series of 2021, which imposes a moratorium on new OLPs.
The SEC said the platform’s continued operation “poses undue risk to the general public” and left its customers outside the consumer protections provided under the Financial Products and Services Consumer Protection Act.
Credladder, its agents, representatives, salesmen, conduit entities, subsidiaries and other persons acting on its behalf were ordered to immediately cease all lending activities and transactions.
The SEC also directed that copies of the order be furnished to the Philippine National Police Anti-Cybercrime Group, Cybercrime Investigation and Coordinating Center, and Presidential Anti-Organized Crime Commission for appropriate action, coordination, investigation and enforcement assistance.
