A practical legal guide for consumers, borrowers, merchants, and investors

1) Why verification matters

In the Philippines, “lending” and “financing” are regulated businesses. A company can’t lawfully operate as a lending company or a financing company merely because it has a Facebook page, an app, a DTI business name, or a local business permit. At a minimum, legitimate operators typically have:

Primary SEC registration (they exist as a juridical entity—usually a corporation); and
A separate SEC authority/license to engage specifically in lending or financing (often called a secondary license or certificate of authority).

Verifying registration helps you avoid illegal lenders, reduce fraud risk (advance-fee scams, fake “loan approvals,” identity theft), and gives you clarity on where to complain if problems arise.

2) The legal and regulatory framework (Philippine context)

A. Corporate existence vs. authority to operate

SEC registration (under the Revised Corporation Code) establishes that the entity exists as a corporation and is recorded in the SEC’s registry.
Authority to operate as a lending/financing company is a separate regulatory requirement under special laws:
- Lending Company Regulation Act of 2007 (RA 9474) for lending companies; and
- Financing Company Act of 1998 (RA 8556), as amended (notably by RA 10881), for financing companies.

Key idea: A corporation may be SEC-registered but still not authorized to do lending/financing unless it has the required SEC authority for that business.

B. Other laws that often matter in practice

Depending on the business model (especially online lending), these commonly come into play:

Data Privacy Act (RA 10173) (collection/use/sharing of borrower data; phone contacts access; harassment via disclosure).
Truth in Lending Act (RA 3765) (disclosure of finance charges and credit terms—implementation varies by creditor type, but disclosure principles are relevant).
Civil Code and jurisprudence on unconscionable interest/penalties (even with the general suspension of usury ceilings, courts can strike down unconscionable rates and oppressive stipulations).
Anti-Wiretapping Act (RA 4200) (be careful with recording calls/communications as “evidence”; obtain legal advice on lawful documentation methods).
If the entity is actually a bank, quasi-bank, pawnshop, or other BSP-supervised institution, the Bangko Sentral ng Pilipinas (BSP) is the regulator (not the SEC for licensing).

3) Know what you’re verifying: “Lending” vs “Financing”

While details can get technical, this practical distinction helps:

Lending company: generally engaged in granting loans from its own capital to the public (subject to the lending law and SEC rules).
Financing company: generally engaged in extending credit connected to sale of goods/services, leasing, receivables financing, installment credit, or similar financing arrangements (subject to the financing law and SEC rules).

Some groups use “lending,” “financing,” “loan,” and “credit” interchangeably in marketing—so you should verify what they legally are and what they’re authorized to do.

4) What documents a legitimate company should be able to show you

Ask for clear copies (not just screenshots of logos). At minimum:

A. Proof the entity exists (primary SEC registration)

Certificate of Incorporation / Certificate of Registration (corporate name + SEC registration number).
Articles of Incorporation and By-Laws (or By-Laws certification).

B. Proof the entity is authorized for lending/financing (secondary authority)

For a lending company: SEC Certificate of Authority (or equivalent SEC-issued authority) to operate as a lending company.
For a financing company: SEC Certificate of Authority (or equivalent) to operate as a financing company.

C. “Good standing” / operational legitimacy indicators (supporting)

Latest General Information Sheet (GIS) (lists directors/officers, address, etc.).
Latest Audited Financial Statements (AFS) (often filed with SEC).
Local business permit (Mayor’s Permit) for the principal office and branches (not a substitute for SEC authority).
BIR registration (e.g., Certificate of Registration) for taxation (also not a substitute for SEC authority).

If they refuse to provide the lending/financing authority or keep diverting you to a DTI certificate, that’s a major red flag.

5) Step-by-step: how to verify with the SEC (practical workflow)

Step 1 — Get the exact legal name and SEC registration number

Ask the company for:

Exact corporate name as it appears on SEC documents (punctuation matters: “Inc.”, “Corp.”, etc.).
SEC registration number.
Principal office address as on the SEC record.

Don’t rely on:

App name alone
Facebook page name
“Group of companies” branding
A trade name without the registered corporate name

Step 2 — Use SEC’s official company verification/search service

The SEC provides public-facing search/verification channels (online verification tools and/or paid document retrieval platforms) where you can:

Search the company name / SEC registration number
Check status (e.g., active, delinquent, dissolved, revoked—terms vary by SEC system and record)
Request copies of filed documents (commonly GIS/AFS and incorporation records)

What you’re looking for in the result:

Exact name match (or a clearly linked name history, if applicable)
SEC registration number matches what they gave you
Company status is not flagged in a way that indicates it cannot legally operate

Step 3 — Verify the authority to operate as a lending/financing company

This is the part many people miss.

Confirm whether the SEC record or SEC-issued document shows the company has the specific authority as a:

Lending Company, or
Financing Company

Also confirm whether the authority:

Matches the company’s exact legal name
Has not been suspended, revoked, expired, or otherwise invalidated
Covers the way they operate (e.g., if they run an online lending platform/app, see Step 4)

Step 4 — If it’s online/app-based: verify platform registration and compliance posture

If the company lends through:

a mobile app,
a website,
social media channels with digital onboarding,

then treat it as higher risk and do extra checks:

Confirm the operator is an SEC-authorized lending/financing company and that the online platform is not operating under a different undisclosed entity.
Check whether the company is the same entity named in:
- the app’s terms and conditions,
- privacy notice,
- loan agreement,
- and receipts/disbursement trails.

Mismatch example: The app says it’s operated by “ABC Tech Solutions,” but the loan agreement is with “XYZ Lending Corporation.” That requires deeper verification of relationships and authority.

Step 5 — Cross-check SEC records against what you are signing/paying

Before signing or paying any “processing fee,” compare:

Corporate name on SEC record vs. name on the contract
Address on SEC record vs. address on receipts/communications
Authorized signatory (see next section)

If you are dealing with a representative, ask for proof they can bind the corporation:

Secretary’s Certificate / Board Resolution authorizing the representative (especially for large loans or corporate borrowers)

6) How to read and evaluate what you find

A. “SEC-registered” does not automatically mean “safe”

SEC registration is not a guarantee that:

terms are fair,
collection practices are lawful,
the company is financially stable,
the transaction is scam-free.

It only proves there is (or was) a registered entity on record and, if applicable, that it has (or had) authority to operate in that regulated space.

B. Watch for “name confusion”

Common tactics include:

Using a name similar to a legitimate company
Using only a brand/trade name and hiding the real contracting party
Using a dormant/old corporation name to appear legitimate while operating outside its authority

C. Check the company’s compliance behavior

Even authorized companies can violate rules. Practical indicators:

Do they provide complete disclosures (rates, fees, penalties, effective cost)?
Do they provide a clear privacy notice and lawful data handling?
Do they harass or threaten you, contact your phonebook, or shame you publicly?
Do they demand advance fees before any verifiable disbursement?

7) Red flags that strongly suggest the lender/financier is illegal or risky

Only shows DTI papers (DTI is not the licensing body for lending/financing companies).
Refuses to give the SEC Certificate of Authority for lending/financing.
Demands advance payment (“insurance,” “processing,” “release fee,” “verification fee”) before disbursement, especially to personal accounts.
No verifiable office address; only chat-based transactions.
Contract has missing disclosures, vague penalties, or blank fields.
Uses intimidation: threats of arrest for nonpayment (debt is generally not a criminal offense), public shaming, contacting your employer/friends, or doxxing—these can trigger multiple legal issues beyond SEC regulation.
Uses multiple entity names across app, contract, bank transfer, and collection messages.

8) What to do if the company is not SEC-registered or not authorized

If you haven’t transacted yet

Do not proceed.
Do not share sensitive personal data (IDs, selfies with IDs, contact list access, OTPs).
Keep screenshots of ads, chats, and payment instructions.

If you already borrowed or paid fees

Preserve evidence: contracts, receipts, chat logs, call logs, screenshots.
If harassment/data misuse is involved, consider complaints to:
- SEC (for illegal lending/financing operations and regulatory violations),
- National Privacy Commission (for data privacy violations),
- and, when appropriate, law enforcement agencies for scams or cyber-enabled offenses.
Consider consulting counsel about:
- validity of charges,
- unconscionable interest/penalties,
- and remedies (including civil actions, defenses, or settlement strategies).

Practical note: If you plan to document communications, be mindful of laws on recording private communications; use lawful documentation methods and get legal advice.

9) Quick verification checklist (copy/paste)

Company Identity

Exact legal corporate name (with Inc./Corp.)
SEC registration number
Principal office address (as on SEC record)

Authority

SEC authority/certificate to operate as Lending Company or Financing Company
Authority matches the exact legal name
No indication it is suspended/revoked/invalid

Documents

Certificate of Incorporation/Registration
Articles/By-Laws
Latest GIS
Latest AFS (if available/required)
Mayor’s permit and BIR registration (supporting only)

Consistency

Same legal entity appears in ads/app/contract/receipts
Payment instructions are corporate and documented
Signatories are properly authorized (for bigger transactions)

10) Frequently asked questions

“They’re SEC-registered. Why do I still need to check authority?”

Because SEC registration only proves the corporation exists. Lending/financing is a regulated activity that typically requires a separate SEC authority.

“What if they say they’re a cooperative offering loans?”

Cooperatives are generally regulated by the Cooperative Development Authority (CDA), not the SEC for lending/financing licensing. Verify with the correct regulator.

“What if it’s a bank or pawnshop?”

Banks and many lending-related financial institutions are under the BSP. Verify with BSP-supervised lists and the institution’s license type.

“Does SEC registration make the interest rate automatically legal?”

No. Courts can invalidate unconscionable interest and penalties. Also, abusive collection and data misuse can create liability even if the lender is authorized.

Legal disclaimer

This article is for general information and practical guidance in the Philippine context. It is not legal advice for a specific case. If significant money, threats, identity theft, or data privacy issues are involved, consult a Philippine-licensed lawyer for case-specific advice.