In the Philippines, the rise of Financial Technology (FinTech) has made credit more accessible, but it has also opened the door to predatory and unregistered lenders. Borrowing from an unlicensed Online Lending App (OLA) can lead to debt traps, harassment, and data privacy violations.

Under the Lending Company Regulation Act of 2007 (Republic Act No. 9474) and the Financing Company Act of 1998 (Republic Act No. 8556), all entities engaged in the business of lending must be registered with the Securities and Exchange Commission (SEC).

1. The Two Pillars of Legitimacy

To operate legally, an online lender must possess two distinct certifications from the SEC. An app is not legal just because the company is registered; it must have specific authority to lend.

Certificate of Registration (CR): This proves the company is a legitimate corporation registered with the SEC.
Certificate of Authority (CA): This is the crucial document. It specifically authorizes the corporation to operate as a lending or financing company. Operating without a CA is a criminal offense.

2. Step-by-Step Verification Process

Step A: Check the SEC Official Website

The most reliable method is to cross-reference the app with the SEC’s published lists.

Visit the SEC Philippines official website.
Navigate to the "Lending & Financing Companies" section under the "Public Information" or "Check and Verify" tabs.
The SEC maintains updated PDF lists:

List of Registered Lending Companies
List of Registered Financing Companies
List of Lending Apps with Issued CA (This is the most important list for OLA users).

Step B: Verify the App Name vs. Corporate Name

Many OLAs use "trade names" that differ from their registered corporate names. For example, an app named "EasyCash" might be owned by "XYZ Lending Corp."

Check the "About Us" or "Terms and Conditions" section within the app.
Look for the SEC Registration Number and the Certificate of Authority Number.
Match these details against the SEC’s official list.

Step C: Use the SEC Check App

The SEC has a mobile application (SEC Check App) designed to allow the public to verify the registration status of corporations and lending entities in real-time.

3. SEC Requirements for Online Lenders

Per SEC Memorandum Circular No. 19, series of 2019, all registered lending and financing companies must:

Display their Corporate Name, SEC Registration Number, and CA Number prominently in their advertisements and on the app interface.
Provide a Disclosure Statement to the borrower before the loan is perfected. This must clearly show the net proceeds, interest rates, and all fees (service fees, processing fees, etc.).

4. Red Flags of Unregistered Lenders

If an app exhibits the following traits, it is likely operating illegally or in violation of SEC regulations:

No CA Number: They cannot provide a Certificate of Authority number when asked.
Excessive Permissions: Demanding access to your entire contact list, gallery, or social media accounts (a violation of the Data Privacy Act of 2012).
Pre-deducted Fees: Taking a massive "service fee" upfront, resulting in the borrower receiving much less than the principal amount.
Harassment: Using threats, shaming, or "debt-shaming" (contacting people in your phone book) to collect.

5. What to Do if You Encounter an Illegal App

If you discover an app is not registered, or if a registered app is engaging in unfair debt collection practices, you should:

File a Formal Complaint: Submit a complaint to the SEC Enforcement and Investor Protection Department (EIPD) via email at epd@sec.gov.ph.
Report to the NPC: If your data was misused, file a complaint with the National Privacy Commission (NPC).
Cease Interaction: Avoid providing further personal information or payments to unverified entities that use coercive tactics.

Legal Note: Under the Cybercrime Prevention Act of 2012, certain forms of online harassment and identity theft performed by unregistered lenders are punishable by law.

Would you like me to draft a formal complaint letter template that you can use to report an unregistered lending app to the SEC?