The Philippines has seen an explosion of lending companies, particularly online lending platforms, in recent years. While many provide convenient access to credit, hundreds operate illegally, charge exorbitant interest rates, use predatory collection practices, and engage in harassment, defamation, and shaming of borrowers. Falling victim to an unregistered lender can lead to financial ruin and serious violations of privacy and dignity.

Under Philippine law, all entities whose primary business is lending money (whether online or offline) must be registered with the Securities and Exchange Commission (SEC) and must secure a Certificate of Authority (CA) to operate as a lending or financing company. Operating without this authority is a criminal offense under Republic Act No. 9474 (Lending Company Regulation Act of 2007) and Republic Act No. 8556 (Financing Company Act of 1998).

This article explains, step by step, exactly how to verify if a lending company is legitimate and SEC-registered, the legal requirements they must comply with, red flags to watch out for, and what to do if you encounter an illegal lender.

1. Understand the Legal Difference: Any Company Can Lend Incidentally, But Only SEC-Authorized Entities Can Operate as Lending Companies

A regular corporation (e.g., a retailer or employer) may lend money incidentally without SEC authority.
However, if the primary or major business activity is lending money or offering credit facilities, the entity must obtain SEC registration as a financing or lending company and secure a Certificate of Authority.
Online lending apps, “cash loan” providers, “buy now pay later” platforms, and salary loan companies almost always fall under this category → they are required to have SEC authority.

2. Step-by-Step Guide: How to Verify Legitimacy

Step 1: Check if the Company is SEC-Registered as a Corporation (Basic Registration)

Go to the SEC website: https://www.sec.gov.ph/
→ Click “SEC i-View” or “Company Registration and Monitoring”
→ Use the SEC Company Search tool (https://seci-view.sec.gov.ph/)

Enter the exact company name (e.g., “QuickCash Lending Inc.” or “FastPeso Online Lending Corp.”).
This will show:

Registration date
SEC registration number
Registered address
Directors/officers
Current status (active, suspended, revoked)

If the company does not appear at all, it is 99% likely operating illegally.

Step 2: Check if It Has a Certificate of Authority to Operate as a Lending/Financing Company (The Most Important Step)

Having basic SEC corporate registration is not enough. The company must also have specific authority to engage in lending as its primary business.

Go to: https://www.sec.gov.ph/lending-companies-and-financing-companies-2/

The SEC maintains and regularly updates these official lists (usually in PDF format):

List of Registered Lending Companies with Certificate of Authority
List of Registered Financing Companies with Certificate of Authority
List of Online Lending Platforms (OLPs) authorized to operate

Download the latest lists and search (Ctrl+F) for the exact company name.

As of the latest published lists in 2025, there are approximately 1,800–2,000 entities with valid Certificates of Authority, while thousands of apps and companies operate illegally.

If the company is not on these lists, it is prohibited from lending and any loan contract with them may be considered void for being contrary to law.

Step 3: Check SEC Advisories and Cease & Desist Orders

Visit: https://www.sec.gov.ph/advisories-2/

The SEC regularly issues:

Public advisories warning against specific illegal lending apps and companies
Cease and Desist Orders (CDOs) against entities operating without authority
Lists of entities charged with syndication or violations of the Securities Regulation Code

Search the company name or app name in these advisories. If it appears here, do not borrow from them.

Step 4: Verify Physical Office and Contact Details

Legitimate SEC-registered lending companies are required to maintain a physical office in the Philippines.
Red flags:

No physical address listed
Address is a virtual office, co-working space, or residential unit
Contact numbers are only mobile or VoIP (e.g., Google Voice, TextNow)

You may call the SEC Lending and Credit Division at (02) 8818-5438 or email lcdd@sec.gov.ph to confirm legitimacy.

3. Common Red Flags of Illegal or Predatory Lenders

Even if a company appears registered, watch for these practices (many of which violate SEC rules or the Data Privacy Act):

Interest rates exceeding 6% per month (72% per annum) on small, short-term loans — while usury is technically decriminalized, the Supreme Court has ruled that “unconscionable” rates may be void.
Requires access to contacts, photos, or camera upon app installation.
Threatens to shame you by sending messages to your contacts if you default.
Deducts charges upfront (“processing fee,” “service fee”) leaving you with only 50–70% of the approved amount.
No written loan agreement or disclosure statement.
Uses names very similar to legitimate companies (e.g., “Cashalo” vs “Cashalow,” “UnaCash” vs “UnaCashNow”).
Claims to be “registered with DTI” only — DTI registration is irrelevant for lending activities.

4. Legal Consequences for Operating Without SEC Authority

Violation of RA 9474/RA 8556: Fine of ₱50,000 to ₱2,000,000 or imprisonment of 6 months to 10 years, or both.
Violation of Securities Regulation Code (for syndication or offering securities without license): Up to ₱5,000,000 fine or 21 years imprisonment.
Data Privacy Act violations (harassment, unauthorized disclosure): Up to ₱5,000,000 fine and imprisonment.
Unfair debt collection practices may also violate the Consumer Act and constitute cyber-libel or grave coercion.

The SEC, in coordination with the NBI, PNP, and DICT, has been conducting raids and filing criminal cases against illegal online lending operators.

5. What to Do If You’ve Already Borrowed from an Illegal Lender

You are not obligated to pay exorbitant interest or penalties; courts have ruled that contracts with unregistered lenders are void ab initio.
Pay only the principal amount you actually received, if you wish (though even this is debatable).
File complaints with:
- SEC Enforcement and Investor Protection Department (eipd@sec.gov.ph)
- National Privacy Commission (for harassment and data privacy violations)
- NBI Cybercrime Division
- PNP Anti-Cybercrime Group
Keep records of all threats and harassment as evidence.

Conclusion

Before borrowing from any lending company or downloading any loan app, always perform the three critical checks:

SEC company registration search
Certificate of Authority list (lending/financing companies)
SEC advisories and CDOs

It takes less than five minutes and can save you from years of harassment and financial distress.

Borrow only from entities that appear on the official SEC lists of authorized lending and financing companies. Your financial safety and personal dignity depend on it.

For the most updated lists and advisories, visit www.sec.gov.ph regularly.