In the Philippines, the proliferation of online lending platforms and traditional financing firms has made credit more accessible than ever. However, this ease of access has also paved the way for predatory lenders and unregistered entities. To protect oneself from harassment, exorbitant interest rates, and data privacy breaches, it is critical to verify that a lending company is duly registered and authorized by the Securities and Exchange Commission (SEC).

Under Philippine law, specifically Republic Act No. 9474 (Lending Company Regulation Act of 2007) and Republic Act No. 8556 (Financing Company Act of 1998), no entity shall operate as a lending or financing company without a valid incorporation and secondary license from the SEC.

1. The Two-Tiered Licensing Requirement

A "legit" lending company must possess two distinct certifications from the SEC. Being "registered" as a corporation is not enough to legally lend money to the public.

Certificate of Incorporation: This proves the entity is a registered corporation or partnership. It gives the company a "birth certificate" but does not grant the power to engage in lending.
Certificate of Authority (CA): This is the secondary license required specifically to operate as a lending or financing company. Operating without a CA is a criminal offense.

2. Step-by-Step Verification Process

A. Check the SEC Official Lists

The most reliable method is to consult the SEC’s database. The Commission regularly updates lists of entities with revoked licenses and those that are in good standing.

Visit the SEC Website: Navigate to the official SEC Philippines portal.
Access the "Lending & Financing Companies" Section: Look for the published lists of "Lending Companies with Certificate of Authority" and "Financing Companies with Certificate of Authority."
Verify Online Lending Platforms (OLPs): If you are using a mobile app, the SEC maintains a specific list of Registered Online Lending Platforms. If the app name is not on this list, it is unauthorized, even if the parent company is registered.

B. Request Official Documents

Before signing any contract or providing personal data, demand to see the company's Certificate of Authority Number. A legitimate lender will prominently display this on their website, mobile app, or physical office. Cross-reference this number with the SEC’s online database.

C. Use the SEC Check App

The SEC has launched mobile tools and verification portals (such as the SEC Check App) designed to allow the public to verify the registration status of corporations in real-time.

3. Red Flags of Unregistered Lenders

If a company is not listed or refuses to provide its CA number, watch for these common indicators of "predatory" or illegal lending:

Hidden Fees: They do not provide a "Disclosure Statement" before the loan is consummated (a violation of the Truth in Lending Act).
Access to Contacts: The mobile app demands access to your phone’s contact list, gallery, or social media accounts.
Harassment: They use debt-shaming, threats, or profane language to collect payments.
Vague Business Address: They lack a physical office or provide a dummy address.

4. The Importance of the "Disclosure Statement"

Pursuant to SEC Memorandum Circular No. 7, Series of 2011, all lenders are required to furnish borrowers with a Disclosure Statement. This document must clearly outline:

The cash price or amount to be loaned.
All finance charges (interest, service fees, etc.).
The net proceeds of the loan.
The schedule of payments and the Effective Interest Rate (EIR).

Failure to provide this document is a strong signal that the entity is not compliant with SEC regulations.

5. Legal Recourse Against Illegal Lenders

If you discover that a company is lending without a Certificate of Authority or is engaging in unfair collection practices (as defined under SEC MC No. 18, Series of 2019), you may take the following actions:

File a Formal Complaint: Submit a verified complaint to the SEC Corporate Governance and Finance Department (CGFD).
Report to the NPC: If your data was leaked or used to harass you, file a complaint with the National Privacy Commission (NPC) for violations of the Data Privacy Act of 2012.
Cease and Desist Orders: Check if the SEC has already issued a Cease and Desist Order (CDO) against the company. If a CDO exists, the company is legally barred from collecting or issuing new loans.