July 24, 2024

The Securities and Exchange Commission has revoked with finality the certificate of authority (CA) of Populus Lending Corporation to operate as a lending firm for unlawful debt collection practices and for failure to disclose its online lending platforms (OLPs) to the Commission.

In an order dated July 14, the SEC Financing and Lending Companies Division (FinLend) found that Populus Lending has committed several violations of SEC Memorandum Circular 18, s. 2019 (MC 18) on the Prohibition on Unfair Debt Collection Practices.

The company was also found to have violated SEC Memorandum Circular 19, s. 2019 (MC 19) requiring financing and lending companies to disclose all the OLPs they operate to the Commission.

The case stemmed from nine complaints and 355 informal complaints filed by former Populus Lending clients from September 2022 to March, alleging that the company resorted to using threats, obscene language, false representations, and doxing tactics, or using information about an individual with malicious intent, in their debt collection practices.

The complainants cited receiving threatening messages, aggressive comments on their Facebook posts, sending demand messages to people not involved in the loan but are acquainted with the complainants, and threatening to blacklist them in all financial institutions, among others.

MC 18 prohibits the use of threats, insults, obscenities, profane language, and any false representations or deceptive means to force any individual to pay their debts. The guidelines also preclude lending and financing companies from contacting people in the borrower’s contact list without their consent, among other conditions.

The implementation of a search warrant by the Philippine National Police Anti-Cybercrime Group, together with the SEC Enforcement and Investor Protection Department revealed that Populus Lending had been operating Pesopop, Antwallet, Dragonloan, Catcash, Topeso, Takecash, Pesohere, Weagle, Cocopeso, Cashin, Candycash, and Cashcow in its Pasig City office.

Data from the SEC Corporate Go-vernance and Finance Department show that Populus Lending only has four registered OLPs with the Commission, namely Pesopop, PesoCow, NewCash, and LuckyLoan.

MC 19 requires lending and financing companies to submit an affidavit of compliance to SEC to ensure that their OLPs are registered.

“Based on the digital forensic exa-mination conducted onsite on July 22, 2022, particularly the seized devices and the statements of the collection agents, and its collecting agents were operating and using 13 OLPs, not four OLPs,” the revocation order read.

“Simply put, we find that (Populus Lending) violated the above-cited SEC Circulars and exercised misrepresentation and deceit.”

The Commission previously issued a cease and desist order against Populus Lending for its unfair debt collection practices.

Given the company’s failure to appeal the revocation order, the SEC through an order dated Aug. 1 made the decision final and executory.

To date, the SEC has cancelled the licenses of 41 financing/lending companies due to various violations of applicable rules and regulations. A total of 81 OLPs operated by unregistered financing and lending companies have also been ordered to cease and desist their operations for lack of authority to operate as a lending or financing company.

Further, six financing and lending companies, with their 26 OLPs, including four owned by Populus Lending, were also ordered to stop their operations for violation of MC 18, in relation to Republic Act 11765, or the Financial Products and Services Consumer Protection Act.

The SEC, through the Corporate Governance and Finance Department, has likewise revoked the primary registration of a total of 2,084 lending companies to date for non-compliance with Republic Act 9474, or the Lending Company Regulation Act.  – Press release