Checking the Legitimacy of SEC-Registered Lending Companies in the Philippines
A comprehensive legal guide (updated to July 31 2025)
1 | Why Legitimacy Matters
Unlicensed or rogue lenders routinely charge usurious rates, harvest personal data, and employ abusive collection tactics. Borrowers who deal only with lawfully licensed lending companies gain the protections of Philippine financial-consumer laws and the oversight of the Securities and Exchange Commission (SEC).
2 | Governing Legal Framework
| Law / Regulation | Key Points for Lending Companies |
|---|---|
| Republic Act (RA) 9474 – Lending Company Regulation Act of 2007 | Requires every lending company to secure both (a) SEC corporate registration and (b) a separate Certificate of Authority (CA) to operate as a lender; prescribes ₱1 million minimum paid-in capital, ownership restrictions, and criminal penalties. |
| Revised Corporation Code (RA 11232) | Provides the rules for SEC registration of the corporation itself, directors’ fiduciary duties, and corporate governance. |
| Financial Products and Services Consumer Protection Act (RA 11765, 2022) | Empowers SEC to issue cease-and-desist orders, impose fines up to ₱2 million per act plus ₱100 000/day of continuing violation, and award restitution to aggrieved borrowers. |
| Truth in Lending Act (RA 3765) & Bangko Sentral ng Pilipinas (BSP) Circular 960 | Mandate full disclosure of finance charges and effective interest rates. |
| SEC Memorandum Circulars (MCs) | • MC 18-2019: registration of online lending platforms • MC 19-2019: prohibition on “shaming” of borrowers • MC 10-2022: beneficial-ownership disclosure • MC 1-2023: annual AMLA compliance certification, etc. |
| Anti-Money Laundering Act (AMLA) & AMLC Regs | Lending companies are covered persons; must register with AMLC, perform KYC, and file CTRs/STRs. |
| Data Privacy Act (RA 10173) | Limits data collection and penalizes non-consensual disclosure of borrower information (e.g., contact-list scraping). |
3 | What Makes a Lending Company Legitimate?
- SEC Certificate of Incorporation (CI) – proves the entity exists as a corporation or OPC.
- Certificate of Authority (CA) to Operate as a Lending Company – must be displayed in the principal office and on websites/apps.
- Current Inclusion in the SEC’s Published “List of Licensed Lending Companies” – updated monthly.
- No outstanding SEC revocation order, cease-and-desist order (CDO), or notice of revocation.
- Compliance Filings – General Information Sheet (GIS), Audited FS, Beneficial-Ownership declaration, AMLC registration number.
Tip: The CA number usually follows the format C-20XX-XXXXX-LC; a revoked CA no longer appears in the live SEC list.
4 | Step-by-Step Verification Guide
| Step | How to Perform | What to Look For |
|---|---|---|
| 1. Search SEC Express / CRS | Via ► https://cris.secexpress.ph (Company Registration System). | Exact corporate name; verify SEC Registration No. and Date. |
| 2. Obtain Free View of CA | In CRS, click ‘View Scanned Documents’ → Certificate of Authority to Operate as Lending Company. | Check validity period; must be signed by the SEC Corporate Governance and Finance Department director. |
| 3. Download Latest Licensed-Lender PDF | SEC normally posts “List of Lending Companies with CA” on its website > Lending Companies tab. | Confirm the company appears and its CA is marked ACTIVE. |
| 4. Call or Email the SEC’s Financing and Lending Division (FLD) | Tel +63 (02) 8818-5467; fld@sec.gov.ph. | Ask: “Is XYZ Finance Corporation in good standing?” |
| 5. Inspect the Entity’s Disclosures | Physical office: CA must be displayed conspicuously. Websites and mobile apps: CA number and SEC Registration No. must be on the landing page and loan agreement. | Any omission is a violation of MC 19-2019 §1. |
| 6. Cross-Check Business Permits | Verify mayor’s permit and BIR registration; scammers often skip local licensing. | Names and addresses should match SEC records. |
| 7. Review App Permissions & Privacy Policy | On Google Play / App Store and app website. | Excessive permissions (contacts, SMS) and no privacy policy are red flags under DPA. |
5 | Common Red Flags of Illegitimate Lenders
- No CA or uses another entity’s CA number.
- Charges advance processing fees before loan release (prohibited under RA 9474).
- Interest > 6% per month undisclosed in the contract.
- Demands blank checks or ATM cards as collateral.
- Uses harassment: threats of incarceration, social-media shaming, texts to contact list.
- App developer or corporate address is outside the Philippines but claims SEC registration.
6 | Administrative and Criminal Sanctions
| Violation | Penalty under RA 9474 |
|---|---|
| Operating without CA | ₱10 000 – ₱50 000 fine and/or 6 months – 10 years imprisonment; plus forfeiture of income. |
| False statements to SEC | Revocation of CI and CA; officers may be disqualified from any corporate directorship for 5 years. |
| Continuing to operate after CDO | Daily fine of ₱100 000 under RA 11765 §11 plus contempt power of the SEC. |
| Privacy violation / shaming | Up to ₱5 million fine and 3 years imprisonment under DPA; separate penalties under Cybercrime Prevention Act. |
SEC may also coordinate with NBI-Cybercrime Division and PNP-Anti-Cybercrime Group to file estafa or unjust vexation charges against abusive collectors.
7 | Borrower Remedies & How to File a Complaint
Prepare Evidence
- Loan agreement, screenshots, call recordings, payment receipts, abusive messages.
File with SEC Enforcement and Investor Protection Department (EIPD)
- Use the Online Complaint Form or email eipd@sec.gov.ph.
- Attach sworn complaint-affidavit (notarized) + evidence.
Optional Parallel Actions
- National Privacy Commission: if doxxing or data misuse.
- DTI – Fair Trade Enforcement Bureau: deceptive advertising.
- Small Claims Court: to contest unlawful charges ≤ ₱1 million.
- Barangay / RTC Criminal Case: for threats, libel, cyber-libel.
Time limits: SEC administrative complaints for violations of RA 9474 prescribe in five (5) years from discovery.
8 | Special Considerations for Online Lending Platforms
| Requirement | Source | Practical Effect |
|---|---|---|
| Register each distinct mobile app and website with SEC before launch | MC 18-2019 §4 | Creates an audit trail; new app release needs prior SEC approval. |
| Mandatory renaming if confusingly similar to revoked entity | MC 16-2024 | Prevents “phoenix” lenders. |
| Prohibition on contact-list harvesting | MC 19-2019 §3 | Apps may request only camera and storage permissions necessary to provide the service. |
| In-app complaint button linked to SEC | MC 6-2022 | Borrowers can report abuse without leaving the app. |
9 | Due-Diligence Checklist for Businesses & High-Value Borrowers
Request copies of the following and verify authenticity:
- SEC Registration Certificate & CA (originals, not photocopies)
- Latest Audited Financial Statements stamped “Received” by SEC & BIR
- Articles of Incorporation & by-laws to confirm authorized capital stock
- AMLC registration certificate
- Latest GIS showing current directors and beneficial owners
- Board resolution authorizing loan disbursement officers
- Professional Indemnity Insurance (if any)
10 | Looking Forward: Regulatory Trends (2025+)
- Digital Lending Service Providers (DLSPs). Draft 2025 SEC rules will require fintech-style servicer registration for white-label platforms.
- Open Finance Integration. BSP’s Open Finance Roadmap may let borrowers port credit data, reducing dependency on invasive data scraping.
- Unified Credit Registry. Credit Information Corporation (CIC) collaboration with SEC to auto-suspend lenders that fail to submit loan data for 2 consecutive quarters.
- Higher Capital Floors. Legislative proposals (HB 9345/SB 2331) would raise minimum paid-in capital to ₱5 million in Metro Manila and ₱2 million elsewhere.
11 | Conclusion
Verifying a lending company’s legitimacy is no longer optional—it is a borrower’s first line of defense. The SEC has armed the public with online tools, aggressive enforcement powers, and a clear paper trail (CI + CA) that separates lawful credit providers from scammers. Follow the outlined verification steps, watch for the red flags, and don’t hesitate to invoke the remedies the law provides.
This article is for informational purposes only and does not constitute legal advice. Consult a qualified Philippine lawyer for advice on specific cases.