SEC sanctions Surity Cash for violating lending circular on debt collection

THE Securities and Exchange Commission (SEC) has imposed a P1-million fine on Surity Cash Lending Investors Corp. for what it said were violations of its rules on debt collection practices.

In a statement on Wednesday, the SEC said its en banc panel found Surity Cash in violation of three provisions under SEC Memorandum Circular (MC) No. 18, Series of 2019, which sets the guidelines against unfair debt collection practices for lending and financing companies.

“While this commission is not imposing the penalty of suspension or the supreme penalty of revocation at this time, unfair or abusive debt collection and recovery practices have no place in the lending/financing industry. These practices will never be considered reasonable and legally permissible means to collect a loan,” the SEC order dated Sept. 16 said.

The SEC said the decision should be considered by the company as “a stern and final warning” that any further or repeated violations of MC No. 18 and other applicable laws, rules, and regulations would be dealt with more severely.

According to the SEC, Surity Cash was found to have violated Section 1 of MC No. 18, which prohibits the use of threats, obscene or insulting language, and the disclosure of borrowers’ personal information in connection with debt collection.

The SEC also cited a violation of Section 4 of the circular for the delayed submission of the company’s sworn certification confirming compliance with the requirement to establish a customer service department or designate personnel to handle borrower concerns.

The SEC said it allowed Surity Cash to maintain its corporate registration but reminded the company to strictly observe regulatory requirements.

Surity Cash Lending Investors Corp. has yet to respond to BusinessWorld’s request for comment sent via e-mail. — Alexandria Grace C. Magno