A practical legal guide for borrowers, employees, and compliance officers

1) Why the SEC—and when it has jurisdiction

In the Philippines, lending companies and financing companies are primarily regulated by the Securities and Exchange Commission (SEC). The SEC’s mandate covers:

Granting, suspending, or revoking the Certificate of Authority (CA) to operate as a lending/financing company.
Setting conduct standards (including rules for online lending platforms).
Investigating complaints and imposing administrative sanctions (fines, suspension/revocation of CA, cease-and-desist orders), and referring criminal violations to the Department of Justice (DOJ).

Banks and their subsidiaries are supervised by the Bangko Sentral ng Pilipinas (BSP); insurance entities by the Insurance Commission (IC). If you’re unsure, check the entity’s full legal name and registration status before filing.

2) Key legal framework (Philippine context)

Lending Company Regulation Act (LCRA) and its IRR – foundational rules for lending companies (corporate form, CA, conduct).
Financing Company Act – parallel regime for financing companies.
Financial Products and Services Consumer Protection Act (FCPA) – prohibits unfair, deceptive, abusive acts/practices (UDAAP) and strengthens SEC’s market conduct powers.
Truth in Lending Act – requires clear disclosure of the true cost of credit (interest, charges).
Data Privacy Act (DPA) – governs collection/processing of personal data (often implicated in app-based lending).
Rules on Electronic Evidence – screenshots, emails, recordings (with proper foundation) may be used in administrative proceedings.
Revised Corporation Code – corporate governance and director/officer liability concepts.

The SEC also issues Memorandum Circulars and advisories (e.g., on unfair debt collection and online lending apps). Treat these as binding conduct standards for SEC-regulated firms and their third-party service providers.

3) What counts as “non-compliance” worth reporting

Below are common, SEC-actionable issues. You can report even a single ground; list all that apply:

A. Licensing/registration problems

Operating without an SEC registration and/or without a CA as a lending/financing company.
Using an unregistered trade name or unapproved online lending platform (different app names = separate approvals).
Failure to display CA details at principal place of business/website/app.

B. Disclosure and pricing violations

No pre-loan disclosure of interest, fees, and effective rate; or misleading “0%” claims offset by hidden charges.
Undisclosed add-ons (processing fees, penalties) or balloon clauses that were not explained.
Refusal to provide a copy of the loan agreement and amortization schedule before consummation.

C. Collection and conduct abuses

Harassment (insults, threats, doxxing, public shaming, contacting employer/phonebook to coerce payment).
Misrepresentation as law enforcement, court, or government agents; fake “warrants,” “subpoenas,” or “cases.”
Excessive, repetitive, or off-hours calls; contacting third parties not named as co-makers/guarantors.
Retention of IDs/ATM cards or requiring blank post-dated checks as a condition for release.
Debt collection by unregistered third-party agencies that disregard SEC rules.

D. Privacy and security breaches

Unconsented data scraping (contacts, photos) and broadcasting of borrower data.
Failure to observe data minimization, purpose limitation, and security measures.
No or inadequate privacy notice and consent records.

E. Governance and reporting lapses

Failure to submit audited financial statements, General Information Sheet (GIS), or mandatory reports.
False statements in regulatory filings; unqualified or conflicted Compliance Officer.

Interest caps. The Usury Law ceilings were effectively lifted decades ago, but unconscionable interest can still be struck down under the Civil Code and consumer protection standards. Unfair pricing tied to deception or coercion is actionable.

4) Evidence: what to gather (administrative-case ready)

Create a single digital folder with filename conventions (e.g., YYYY-MM-DD – BorrowerName – LenderName). Include:

Identity and authority: your ID; if filing for someone else, an SPA or corporate authority (board resolution).
Counterparty identification: exact legal name, trade name/app name(s), principal address, numbers, URLs, app store links, screenshots of CA (or the lack of it).
Contract set: application form, loan agreement, disclosure statement, amortization schedule, official receipts, emails/SMS/app chats.
Collection proof: call logs, voice recordings (with time/date stamps), voicemail, messages, screenshots showing threats/harassment/misrepresentation.
Pricing proof: fee breakdowns, before/after screenshots of advertised vs. actual charges.
Technical proof: app permission prompts, privacy notice, data that was accessed (e.g., contacts), and any logs.
Witness statements: concise, dated narratives from affected persons (including HR if workplace was contacted).
Chronology: a one-page timeline of key events with references to the evidentiary files.

For electronic evidence, preserve original files (not just pasted images). Export in common formats (PDF, MP4, CSV). Keep metadata intact.

5) Where to report—and how

A. File a complaint with the SEC

The SEC’s enforcement arm handles complaints against lending/financing companies. Your complaint-affidavit should include:

Complainant details: name, address, contact info, ID.
Respondent details: legal name, trade/app names, addresses, officers (if known).
Nature of business: lending or financing; online/offline; branch locations.
Facts: clear, chronological narrative; attach a timeline.
Violations alleged: briefly tie facts to rules (e.g., “unfair collection,” “no CA,” “failure to disclose interest”).
Reliefs sought: investigation, fines, cease-and-desist, CA suspension/revocation, officer liability, referral for criminal prosecution.
Attachments: index of evidence with exhibit labels.
Verification/Jurat: sign and have it sworn before a notary public (or via electronic notarization if available).

Filing channels typically accepted by the SEC

In-person at the SEC Main Office or Extension Offices.
By email/online portal (as allowed by current SEC instructions).
By courier (keep proof of mailing/delivery).

Tip: Put “Complaint vs. [Lender/App] for Violations of Lending/Financing Laws” in the subject line and include a one-paragraph case synopsis in your cover letter or email body.

B. Parallel/related filings (often helpful)

National Privacy Commission (NPC) – for privacy breaches, unlawful data processing, or doxxing.
NBI/PNP – for threats, coercion, or cyber-offenses (preserve call recordings and message headers).
DTI/Local Government – for deceptive advertising or LGU permit issues.
App stores/hosting platforms – submit policy violation reports with your evidence bundle.

Parallel reports do not block the SEC case; they frequently accelerate resolution (e.g., app takedowns while SEC investigates the corporate entity).

6) What happens after you report (typical SEC flow)

Docketing & triage. The SEC reviews completeness; you may be asked for clarifications or additional evidence.
Pre-enforcement checks. The SEC verifies registration/CA status, prior advisories, and related complaints.
Show-Cause/Order to Explain. The respondent is directed to answer; failure to respond can trigger adverse action.
Administrative proceedings. Position papers, conferences, and evaluation of evidence (documentary focus).
Relief. The SEC may issue cease-and-desist orders, impose fines, order suspension/revocation of CA, direct corrective measures, and/or refer criminal aspects to the DOJ.
Publication/Advisory. The SEC may release public advisories warning the public about erring firms or unregistered apps.

Timelines vary with complexity and caseload. Well-organized, corroborated submissions move faster.

7) Sanctions and liabilities (overview)

Administrative: fines per violation/day; suspension or revocation of CA; permanent cease-and-desist; disqualification of directors/officers; orders to refund/rectify.
Criminal: for willful violations (e.g., operating without CA, falsified filings); penalties may include imprisonment and fines as set by statute. Responsible officers can be personally liable.
Civil: borrowers may sue for damages, nullity of unconscionable terms, and attorney’s fees.
Data privacy: NPC may impose separate fines and criminal referrals for DPA violations.

8) Practical borrower protections & red flags

You are likely dealing with a non-compliant lender if:

It cannot show an SEC CA or the name on the CA does not match the app/brand.
It demands access to your entire contact list and threatens to message your contacts.
It refuses to give a pre-loan disclosure of interest/fees and a copy of the loan contract.
It asks to keep your ID/ATM card or to sign blank checks.
Collectors pose as police or prosecutors, or send fake legal notices.
The app or collectors call/text late at night, repeatedly, or use slurs and threats.

If you must continue paying while the case is pending: pay through traceable channels, keep receipts, and note that filing a complaint does not waive lawful obligations—but it can stop abusive practices and illegal terms from being enforced.

9) Step-by-step filing checklist

Confirm jurisdiction (SEC vs BSP/IC).
Identify the entity (legal name, CA, app names).
List violations (licensing, disclosure, collection, privacy).
Assemble evidence (contracts, communications, logs, screenshots, recordings).
Draft complaint-affidavit with timeline and exhibit index.
Notarize and file with the SEC (and parallel reports to NPC/NBI/others as needed).
Keep a case file: stamped/acknowledged copy, proof of submission, follow-ups, and any SEC directives.
Preserve data; avoid editing originals after filing.

10) Template: Complaint-Affidavit (editable)

Re: Complaint against [Full Legal Name of Lender/Financing Co.] (a.k.a. “[App/Brand]”) for Violations of Lending/Financing Laws, Unfair Collection Practices, and Related Offenses

I. Parties

I, [Name], of legal age, residing at [Address], may be contacted at [Mobile/Email].
Respondent is [Full Legal Name], with principal office at [Address], operating the lending/financing business under the brand/app “[Name]”.

II. Jurisdiction 3. Respondent is a lending/financing company subject to the SEC’s jurisdiction.

III. Material Facts 4. On [Date], I applied for a loan via [branch/app]. 5. Respondent failed to disclose [interest/fees/effective rate] prior to consummation. 6. On [Dates], Respondent and/or its agents committed the following: a. [Describe harassment/misrepresentation; attach screenshots/recordings as Exhibits “A-1” to “A-n”] b. [Describe privacy breaches; Exhibits “B-1” to “B-n”] c. [Other violations; Exhibits “C-1” to “C-n”]

IV. Violations 7. These acts violate the LCRA/Financing Company rules, the FCPA’s UDAAP prohibitions, SEC circulars on unfair debt collection and online lending, the Truth in Lending Act, and the Data Privacy Act.

V. Reliefs Sought 8. Wherefore, I respectfully pray that the SEC:

Investigate and impose appropriate administrative sanctions;
Issue cease-and-desist orders as warranted;
Suspend or revoke Respondent’s CA;
Refer criminal aspects to the DOJ; and
Grant other just and equitable reliefs.

VI. Verification and Certification Against Forum Shopping 9. I verify the truth of the foregoing and certify I have not commenced any other action involving the same issues, or if any, a status statement is attached.

[Signature over printed name] [Date/Place]

SUBSCRIBED AND SWORN to before me this [Date] at [Place]. [Notary Public details]

11) Compliance-officer corner (for insiders/whistleblowers)

Self-report promptly if a breach has occurred; cooperation can mitigate penalties.
Preserve email trails, board minutes, and compliance reviews showing remediation.
Ensure the Compliance Officer has direct board access and reports on UDAAP, privacy, and outsourcing (collection agencies/IT providers).
Conduct app permission reviews; remove non-essential data access; update privacy notices.
Implement collector training with scripts compliant with SEC standards; log all call attempts and outcomes.

12) FAQs

Q: Can I stay anonymous? A: SEC complaints are typically verified (sworn). You may request confidentiality of certain personal data; for privacy-heavy matters, consider filing with the NPC in parallel, which has specific protective processes.

Q: Do I have to keep paying? A: If the loan is validly due, lawful obligations remain, but you may challenge illegal charges and abusive collection. Pay via traceable channels and dispute in writing the contested portions.

Q: Will the app be removed? A: The SEC can move against the corporate entity and coordinate with platforms. Parallel platform reports (with your evidence) often expedite app takedowns while the SEC case proceeds.

Q: Can officers be personally liable? A: Yes, responsible directors/officers who authorized or tolerated violations can face administrative and criminal accountability.

13) Final takeaways

The SEC has robust tools to curb unregistered operations, unfair debt collection, non-disclosure, and privacy abuses by lending/financing companies.
Strong, well-organized evidence and a clear complaint-affidavit are the fastest way to trigger meaningful enforcement.
Use parallel avenues (NPC, NBI/PNP, app platforms) to protect yourself while the SEC case runs its course.

If you’d like, I can turn this into a fill-in-the-blanks complaint-affidavit (Word) and a one-page timeline template you can use immediately.