The Securities and Exchange Commission has imposed a P1 million penalty on Inclusive Credit Lending Inc. for charging excessive interest rates and carrying out improper debt collection activities.
The regulator’s Financing and Lending Companies Department found the firm violated two key rules: Memorandum Circular No. 3 which sets legal limits on interest and fees for online lending services, and Memorandum Circular No. 18 of 2019 which bans unfair collection methods. The case was opened after a borrower filed a complaint stating the company’s platform Pinoy Peso deducted 38 percent of every loan principal upfront, and that she faced threats, harassment and public embarrassment when she fell behind on payments. Further review showed the fee structure translated to an effective interest rate of 61 percent over seven days, equal to 262 percent each month or 8.67 percent daily—far above the allowed cap of 15 percent per month or roughly 0.5 percent per day. Investigators also confirmed the borrower’s personal details and photo were shared on social media as part of collection efforts. In its official order, the commission noted that creditors have the right to demand payment of valid debts, but this authority does not extend to actions that humiliate or harm a person’s reputation.
