The proliferation of Online Lending Platforms (OLPs) in the Philippines has democratized access to credit, yet it has also facilitated the rise of predatory entities and unlicensed "loan sharks" operating via mobile applications. For a lending entity to operate legally in the digital space, it must adhere to a stringent regulatory framework governed primarily by the Securities and Exchange Commission (SEC).

Below is a comprehensive legal guide on how to verify the legitimacy of an OLP and ensure it is SEC-licensed.

1. The Statutory Requirement: RA 9474 and RA 8556

Under Philippine law, lending activities are governed by two primary statutes:

Republic Act No. 9474 (Lending Company Regulation Act of 2007): Requires all lending companies to be established as a corporation and to obtain a Certificate of Authority (CA) from the SEC.
Republic Act No. 8556 (Financing Company Act of 1998): Governs financing companies, which also require specific SEC licensing to extend credit to the public.

Legal Fact: It is a criminal offense to engage in the business of lending without a valid Certificate of Authority.

2. The SEC Verification Process

Verification involves a two-tier check. A platform may have a registered company name but may not be authorized to operate a specific mobile app.

Step A: Verify the Corporate Registration

Every legitimate lender must first be a registered corporation. You can verify this through the SEC Company Registration and Monitoring Department.

Check if the company has a Certificate of Incorporation.
Note: Registration as a corporation does not automatically grant the right to lend money.

Step B: Verify the Certificate of Authority (CA)

This is the most critical step. A legitimate OLP must possess a Certificate of Authority to Operate as a Lending/Financing Company.

Visit the official SEC Website.
Navigate to the "Lending Companies" or "Financing Companies" tab.
Consult the List of Lending Companies with Certificate of Authority and the List of Recorded Online Lending Platforms.

Step C: Cross-Reference the App Name

The SEC requires companies to disclose their "Business Name" and the "Online Lending Platform Name" they use. Often, the name of the app (e.g., "FastCash") differs from the registered corporate name (e.g., "Sample Lending Corp.").

Check if the specific app name is officially registered under the licensed corporation’s profile on the SEC list.

3. Mandatory Disclosures under SEC MC No. 19 (2019)

The SEC mandates that all OLPs display specific information on their platforms and advertisements. A legitimate app will clearly show:

Corporate Name
SEC Registration Number
Certificate of Authority (CA) Number

Warning Sign: If this information is missing, hidden, or buried in fine print that does not match the SEC database, the platform is likely operating illegally.

4. Compliance with the Truth in Lending Act (RA 3765)

Legitimate lenders must provide a Disclosure Statement before a loan is consummated. This document must clearly outline:

The cash price or amount of the loan.
All finance charges (interest, service fees, processing fees).
The total amount to be paid.
The effective annual interest rate.

Failure to provide a clear, itemized breakdown of fees prior to the user clicking "Accept" is a violation of Philippine lending laws.

5. Privacy and Harassment: NPC Guidelines

Verification of legitimacy also involves assessing the app's data permissions. Under the Data Privacy Act of 2012 and National Privacy Commission (NPC) Circular 20-01, lending apps are prohibited from:

Accessing your contact list or social media contacts.
Accessing your photo gallery for the purpose of "shaming" or harassment.
Requesting excessive permissions unnecessary for credit scoring.

Online lenders that engage in "debt shaming" or contact people in your phone directory are often either unlicensed or in gross violation of SEC and NPC regulations, subjecting them to a Cease and Desist Order (CDO).

6. Red Flags of Unlicensed Lenders

No SEC CA Number: They claim to be "registered" but cannot provide a CA number.
High Upfront Deductions: Significant portions of the loan are deducted as "service fees" (e.g., you borrow ₱5,000 but receive only ₱3,200).
Abnormally Short Terms: Requiring full repayment within 7 days.
Aggressive Permissions: Demanding access to your camera, contacts, and location as a prerequisite for the loan.
Anonymous Presence: No physical office address or legitimate customer service hotline.

Summary Checklist for Borrowers

Verification Step	Requirement
SEC Website	Is the company on the "List of Lending Companies with CA"?
App Disclosure	Does the app display its CA Number and Corporate Name?
NPC Compliance	Does the app ask for access to your contacts or gallery? (Red Flag)
Contract	Is there a formal Disclosure Statement showing the effective interest rate?