The Securities and Exchange Commission (SEC) has permanently revoked the certificate of authority (CA) of KingABC Lending Corp. to operate a lending company for engaging in unfair debt collection practices.
In a resolution dated August 2, the agency’s Corporate Governance and Finance Department (CGFD) has junked the motion for reconsideration filed by KingABC for lack of merit. The said company operates online lending platforms Pondo Loan, Start Loan, Green Loan and Loan Club.
“The department reiterates that the business of lending is imbued with public interest. As such, the commission is mandated to see to it that only lending companies that are serious in their compliance with the laws, rules, and regulations are allowed to operate,” according to the resolution, which became final and executory after KingABC failed to file an appeal within the allowed period.
The agency issued the revocation order on June 7 after finding that KingABC has committed 15 violations of an SEC memorandum circular 18 issued in 2019, which prohibits unfair debt collection practices among financing and lending companies.
The SEC found KingABC to have threatened borrowers with shaming on social media by publishing their names as scammers and contacting people in the borrowers’ contact list despite not being named as co-makers or guarantors.
KingABC also used obscenities, insults, or profane language in its debt collection, and threatened to sue borrowers based on made-up legal bases, the SEC said.
The agency has previously penalized KingABC for its first and second violations of the said regulation. A third violation merits the imposition of a monetary fine, suspension, or revocation of the company’s certificate of authority, depending on the facts, circumstances, and gravity of the case.
Aside from KingABC’s 15 violations, the agency noted 53 more complaints have been filed against the company for its debt collection practices.
The SEC’s memorandum circular was issued September 8, 2019, as part of its response to several complaints for unreasonable, abusive and unfair practices that lending and financing companies employed to collect debt from borrowers.
In its appeal, KingABC argued that the 15 complaints merely contained allegations without proof, and that the volume of complaints by itself was not sufficient to justify the revocation of its CA, given that the SEC circular requires proof of those allegations.
The SEC, however, maintained that the evidence on record more than adequately supported the revocation of KingABC’s documents, emphasizing that during its investigation, the company itself admitted that its agents committed “unlawful and unauthorized” and “unrighteous misconduct” towards its borrowers.
“A review of all the screenshots of messages submitted by the 15 complainants, including the 53 others who also filed complaints against the respondents reveal commonalities and recurring patterns, including the substance of the threats and sentence construction of the said messages,” the resolution read.
“To a reasonable mind, all these pieces of evidence prove respondent committed 15 violations of SEC MC 18. Thus, it was only apt for the CGFD to find respondent guilty of violating SEC MC 18 and impose the penalty of revocation of its license.”
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