The Securities and Exchange Commission (SEC) said Wednesday it has upheld its earlier decision to revoke the license of KingABC Lending Corp. over unfair debt collection practices such as threatening to shame borrowers on social media.
In a statement, the SEC said it has declared final and executory the revocation of the Certificate of Authority (CA) of KingABC Lending to operate a lending company.
Citing the resolution dated August 2 by its Corporate Governance and Finance Department (CGFD), the corporate regulator said it denied the motion for reconsideration filed by KingABC Lending—operator of online lending platforms Pondo Loan, Start Loan, Green Loan, and Loan Club— “for lack of merit.”
“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,” the resolution read.
The resolution became final and executory after KingABC Lending failed to file an appeal within the allowed period, the SEC noted.
It said that the SEC’s CGFD issued the revocation order on June 7 after finding that KingABC Lending has committed 15 violations of SEC Memorandum Circular No. 18, Series of 2019 (SEC MC 18), which provides for the prohibition on unfair debt collection practices of financing companies and lending companies.
The SEC’s CGFD found KingABC Lending 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 Lending also used obscenities, insults, or profane language in its debt collection, and threatened to sue borrowers based on made-up legal bases, according to the SEC’s CGFD.
The SEC’s CGFD has previously penalized KingABC Lending for its first and second violations of SEC MC 18.
A third violation merits the imposition of either a monetary fine, suspension, or revocation of the company’s CA, depending on the facts, circumstances, and gravity of the case.
Aside from KingABC Lending’s 15 violations, the SEC’s CGFD noted that 53 more complaints have been filed against the company for its debt collection practices.
The SEC MC 18 took effect on September 8, 2019, as part of the commission’s response to several complaints for unreasonable, abusive, and unfair practices that lending and financing companies employed to collect debt from borrowers.
In its motion for reconsideration, the SEC said KingABC Lending 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 SEC MC 18 requires proof of those allegations.
The CGFD, however, maintained that the evidence on record more than adequately supported the revocation of KingABC Lending’s CA.
The SEC department further emphasized that during its investigation, KingABC Lending 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 August 2 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,” according to the resolution.
Contact details available for KingABC Lending were not accessible. GMA News Online is still in the process of reaching out to the firm for comment.—AOL, GMA News
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