SEC fines Myloan Lending Investors anew for unfair debt collection practices

The Securities and Exchange Commission (SEC) has directed Myloan Lending Investors, Inc. to stop employing humiliating, coercive, or third-party pressure tactics in its collection activities, in accordance with the Commission’s rules against unfair debt collection practices.

In an order dated February 18, the SEC Financing and Lending Companies Department (FLCD) found Myloan Lending administratively liable for a second violation of SEC Memorandum Circular (MC) No. 18, Series of 2019, in relation to Republic Act No. 11765, or the Financial Products and Services Consumer Protection Act, as well as its implementing rules and regulations, as provided under SEC MC. No. 5, Series of 2023.

MC 18 prohibits abusive and unscrupulous debt collection practices, which include the use of threats, intimidation or coercion, contacting persons in the borrower’s contact list other than the guarantors or co-makers, and use of obscenities, insults or profane language, among others.

The company was directed to pay an administrative fine of P50,000 for its second violation of MC 18, alongside a warning that a further violation of the rule will be dealt with more severely and may result in heavier penalties, including suspension or revocation of its certificate of authority.

The case stemmed from a complaint filed by a borrower who claimed that he experienced improper loan collection practices from Myloan Lending’s collection agents due to delayed payments.

Such messages contained shaming language, threats to contact emergency contacts and employers, as well as statements indicating persistent third-party contact, among others, according to the FLCD.

“These are not neutral reminders. They are coercive communications designed to pressure payment through humiliation and reputational exposure,” the order read.

“Even assuming [the borrower’s] delinquency, such a circumstance does not vest [the company] with a license to employ humiliation, harassment, or the specter of third-party exposure as instruments of coercion. Delinquency may justify reasonable collection efforts; it does not justify abuse,” the order read.
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In addition, FLCD directed the borrower to settle his outstanding loan obligation with Myloan Lending, in accordance with their loan agreements, without prejudice to any lawful restructuring or settlement arrangement they may agree upon.