The Securities and Exchange Commission (SEC) has fined Myloan Lending Investors Inc. and ordered it to stop using abusive debt collection practices, marking another regulatory action against erring lending firms.
In an order dated February 18, the SEC’s Financing and Lending Companies Department found the company liable for a second violation of SEC Memorandum Circular No. 18, Series of 2019, in relation to Financial Products and Services Consumer Protection Act.
The rules prohibit lending companies from using threats, intimidation, harassment, or contacting people in a borrower’s contact list—such as employers or emergency contacts—except for guarantors or co-makers. They also ban the use of obscene or insulting language in collection messages.
The case arose from a borrower’s complaint that Myloan’s collection agents sent messages containing shaming language and threats to contact third parties after he fell behind on payments. According to the SEC, the messages were meant to pressure the borrower through humiliation and reputational harm.
The regulator imposed a P50,000 administrative fine on the company and warned that further violations could lead to heavier penalties, including suspension or revocation of its license to operate.
While penalizing the lender, the SEC also directed the borrower to settle his unpaid loan in line with his agreement.
The latest sanction underscores the SEC’s continued crackdown on abusive lending and reinforces the policy that while lenders may pursue legitimate collection efforts, harassment and public shaming are strictly prohibited under consumer protection laws.
