SEC Philippines Revokes Copperstone Lending's License

The Securities and Exchange Commission (SEC) has cancelled the lending license of Copperstone Lending, Inc., which operates online lending platforms (OLPs) Quickla, Pococash, Blue Peso, Peso Forrest, Moca Moca, Pesobuffet, and Load Cash, for its unfair debt collection practices and its failure to disclose the true and correct terms of loan contracts with borrowers.

In an order dated April 11, the SEC Financing and Lending Companies Division (FinLend) found that Copperstone Lending violated Republic Act No. 3765, or the Truth in Lending Act (TILA), as well as SEC Memorandum Circular No. 18, Series of 2019 (MC 18) on the Prohibition on Unfair Debt Collection Practices.

Accordingly, FinLend revoked Copperstone Lending's Certificate of Authority to operate as a lending company and its primary registration. The company was also ordered to pay P20,000 for violating the TILA.

The order was issued in response to several complaints filed with the SEC regarding Copperstone Lending’s OLPs.

Findings by FinLend revealed that Moca Moca had disbursed loan amounts to borrowers without informing them of the exact amount involved, as well as the interest on overdue payments. It was also found to be falsely advertising terms of the loan contract compared to what was actually contracted with borrowers.

Citing the 2005 case of Development Bank of the Philippines vs. Arcilla, Jr., FinLend noted that the TILA was enacted primarily “to protect [citizens] from a lack of awareness of the true cost of credit to the user by using a full disclosure of such cost with a view of preventing the uninformed use of credit to the detriment of the national economy.”

As such, lending companies are required to disclose to borrowers the cash price or delivered price of the property or service to be acquired; amounts, if any, to be credited as down payment and/or trade-in; the difference between the aforementioned amounts; charges which are paid or to be paid in connection with the transaction; and the total amount to be financed, among others.

“[Copperstone Lending], in stating in its disclosure statement that the loan term is for 180 days, while in truth and in fact, the consumer will be given a lesser period to pay, and in imposing hidden surcharges and interests for not being able to settle the loan for a shorter period, negates the noble intent of the law to give awareness to the true cost of credit,” FinLend held.

Complaints against Moca Moca and Pesobuffet further show that the OLPs threatened borrowers with the filing of estafa cases and sent messages to phone contacts not named as the borrower’s guarantors and references, among other debt collection tactics.

MC 18 prohibits the use of unfair debt collection practices, including the use or threat of use of violence to harm the person, reputation, or property of any person; the use of obscenities, insults, or profane language; as well as the disclosure or publication of names of borrowers who allegedly refuse to pay debts, among others.

​“[Copperstone Lending] violated [provisions of MC 18] for the use of threats to take any action that cannot be legally taken and by contacting the persons in the borrower’s contact list other than those named as guarantors or comakers,” FinLend ruled.