In the Philippines, the rise of financial technology has led to a proliferation of lending platforms and mobile applications. While this has increased financial inclusion, it has also opened the door for predatory lenders and unlicensed entities. Under Philippine law, specifically the Lending Company Regulation Act of 2007 (Republic Act No. 9474) and the Financing Company Act of 1998 (Republic Act No. 8556), any entity engaged in the business of lending must comply with strict registration requirements.

Verifying the legitimacy of a lender is not merely a precautionary measure; it is a critical step in ensuring that the borrower is protected by the Consumer Protection acts of the Philippines.

1. The Two-Tiered Registration Requirement

A common misconception is that a simple "SEC Registration" is enough to make a lending business legal. For a lending or financing company to operate legally in the Philippines, it must possess two distinct documents issued by the Securities and Exchange Commission (SEC):

Certificate of Incorporation: This proves that the entity is a registered corporation. However, being a corporation does not automatically grant the right to lend money to the public.
Certificate of Authority (CA) to Operate as a Lending/Financing Company: This is the crucial license. Without a CA, a corporation cannot legally engage in lending activities.

Legal Note: Operating a lending business without a Certificate of Authority is a criminal offense punishable by fines and imprisonment under R.A. No. 9474.

2. Step-by-Step Verification Process

To verify if a company is authorized to lend, borrowers should follow these official channels:

A. Consult the SEC Official Lists

The SEC maintains updated lists of licensed entities on its official website. Borrowers should look for the following categories:

Lending Companies: Entities governed by R.A. 9474.
Financing Companies: Entities governed by R.A. 8556 (often involved in larger-scale financing like leasing or factoring).
Registered Online Lending Platforms (OLPs): Since many lenders operate via apps, the SEC provides a specific list of "Online Lending Platforms" that are officially tied to a licensed lending or financing company.

B. Cross-Reference the OLP Name and Corporate Name

Many scams use a "brand name" (e.g., "EasyCash") that differs from their "corporate name" (e.g., "XYZ Lending Corp."). The SEC requires that all licensed OLPs disclose their corporate name and Certificate of Authority number on their apps and websites. If the app name does not appear as a registered OLP under a licensed corporation, it is likely unauthorized.

C. Verify the SEC Registration Number and CA Number

Legitimate lenders are mandated to display their Certificate of Authority (CA) Number and SEC Registration Number in all their advertisements and on their platforms. You can verify these numbers by contacting the SEC’s Corporate Governance and Finance Department (CGFD).

3. Red Flags of Illegal Lenders

Even if a company claims to be registered, certain behaviors are indicative of "predatory" or unlicensed lending (often referred to locally as "Online Lending App" or OLA scams):

Absence of Disclosure Statements: Under the Truth in Lending Act (R.A. No. 3765), lenders must provide a clear disclosure statement showing the net proceeds, interest rates, service fees, and other charges before the loan is perfected.
Access to Contacts and Media: Illegal apps often require "permissions" to access your phone’s contact list, gallery, or social media accounts. This is a primary tool for harassment.
Unreasonably High Interest Rates: While the Philippines currently has a ceiling on interest rates for small-value loans (prescribed by the Bangko Sentral ng Pilipinas), rates that double the principal in a matter of weeks are signs of illegal "5-6" schemes or predatory OLPs.
Harassment and Shaming: Legitimate companies are prohibited by SEC Memorandum Circular No. 18 (Series of 2019) from using unfair debt collection practices, such as threatening borrowers, using profane language, or contacting persons on the borrower's contact list.

4. Regulatory Protections and Recourse

The SEC actively monitors the industry and frequently issues "Cease and Desist Orders" (CDO) against companies operating without licenses or those violating the Truth in Lending Act.

Reporting Violations

If a borrower discovers a company is operating without a CA, or if a licensed company is engaging in harassment, they may file a formal complaint with the SEC’s Enforcement and Investor Protection Department (EIPD) or the Corporate Governance and Finance Department (CGFD).

Data Privacy Concerns

Since most lending now occurs via digital platforms, the National Privacy Commission (NPC) also plays a role. If a lender accesses your data illegally or uses it to shame you, they are in violation of the Data Privacy Act of 2012 (R.A. No. 10173).

Summary Checklist for Borrowers

Feature	Legitimate Lender	Illegal/Unlicensed Lender
SEC Documents	Has both Incorporation & Certificate of Authority (CA)	Only has Incorporation or none at all
Transparency	Provides a Truth in Lending Disclosure Statement	Hides fees until the loan is disbursed
App Permissions	Requests only necessary ID and financial info	Requests access to Contacts, Photos, and Social Media
Collection	Follows ethical standards and SEC guidelines	Uses "shame-based" debt collection and harassment
Physical Office	Must have a verifiable registered office address	Often has no physical office or uses fake addresses