In the Philippines, the rise of financial technology has paved the way for numerous lending platforms. However, this growth has also seen a surge in predatory lending practices and unregistered entities. For the protection of the borrowing public, it is critical to distinguish between a legitimate, law-abiding lending company and an illegal operation.

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

1. The Two Pillars of Legitimacy: CR and CA

To be considered legitimate, a lending or financing company must possess two distinct documents issued by the SEC. One is not sufficient without the other:

Certificate of Incorporation (CR): This proves the company is a registered legal entity in the Philippines. However, a CR alone does not authorize a company to engage in lending.
Certificate of Authority (CA): This is the specific license granted by the SEC allowing a corporation to operate as a lending or financing company.

Legal Note: Operating a lending business without a Certificate of Authority is a criminal offense punishable by fines and imprisonment under RA 9474.

2. Step-by-Step Verification Process

A. Check the SEC Official Lists

The most reliable method to verify a company is to consult the SEC’s database. The Commission regularly updates lists of entities with revoked or suspended licenses, as well as those authorized to operate.

Visit the SEC Official Website.
Navigate to the "Lending and Financing Companies" section under the "Public Information" or "Check an Investment/Lending Company" tabs.
Search for the company name in the List of Registered Lending Companies or List of Financing Companies.
If the company operates via a mobile app, check the List of Documented Online Lending Platforms (OLPs).

B. Verify the Online Lending Platform (OLP)

If you are using an app, the SEC requires companies to disclose their Corporate Name, Business Name, SEC Registration Number, and Certificate of Authority Number within the app’s interface and on their official website. Cross-reference these numbers with the SEC’s database.

C. Use the SEC Check App

The SEC has launched mobile tools and verification portals specifically designed to allow users to verify the registration status of firms in real-time.

3. Red Flags of Illegal or Predatory Lenders

Even if a company claims to be registered, certain behaviors may indicate "loan shark" activity or violations of the Securities Regulation Code and SEC Memorandum Circulars:

Absence of Disclosure Statements: Under the Truth in Lending Act (RA 3765), lenders must provide a clear breakdown of the loan proceeds, interest rates, service fees, and other charges before the loan is consummated.
Harassment and Shaming: Legitimate lenders are prohibited from using threats, insults, or "debt shaming" (contacting your phone contacts to inform them of your debt). This violates SEC Memorandum Circular No. 18, series of 2019.
Unreasonably High Interest Rates: While the Philippines currently does not have a strict usury ceiling for all loans, the Bangko Sentral ng Pilipinas (BSP) and SEC monitor "unconscionable" rates.
Vague Physical Address: Legitimate companies must have a verifiable office address. Beware of lenders that only exist on social media platforms like Facebook or Telegram.

4. Legal Recourse and Reporting

If you discover that a company is operating without a license or is engaging in unfair debt collection practices, you should take the following steps:

Gather Evidence: Take screenshots of the app, the loan agreement, the disclosure statement, and any harassing messages.
Contact the SEC Corporate Governance and Finance Department (CGFD): You can file a formal complaint via email at cgfd_enforcement@sec.gov.ph or through the SEC’s online complaint portal.
Coordinate with the NPC: If the lender accessed your contacts or photos without consent, file a complaint with the National Privacy Commission (NPC) for violations of the Data Privacy Act of 2012.

Summary Table for Quick Verification

Requirement	Description
Legal Status	Must be a Corporation (not a Sole Proprietorship or Partnership).
Registration	Must have a Certificate of Incorporation (CR).
License	Must have a Certificate of Authority (CA) to operate.
Transparency	Must provide a Truth in Lending Act Disclosure Statement.
App Listing	If online, the app must be registered as an OLP under a licensed firm.