SEC fines Myloan over unfair collection tactics
THE SECURITIES and Exchange Commission (SEC) has fined Myloan Lending Investors, Inc. P50,000 for unfair and abusive debt collection practices, warning the company against further violations.
In a statement on Monday, the SEC said its Financing and Lending Companies Department found Myloan administratively liable for a second breach of Memorandum Circular No. 18, which sets standards for debt collection conduct.
The case stemmed from a borrower’s complaint alleging that the lender’s collection agents used shaming language, threatened to contact emergency contacts and employers, and repeatedly reached out to third parties over delayed payments.
Under SEC memo, lenders are barred from using or threatening violence, employing insulting or profane language or contacting people listed in a borrower’s contact directory, except guarantors or co-makers.
“These are not neutral reminders. They are coercive communications designed to pressure payment through humiliation and reputational exposure,” the SEC said in its order.
The regulator added that while delinquency may justify reasonable collection efforts, it “does not justify abuse,” rejecting the use of harassment or threats of third-party exposure as collection tools.
Alongside the fine, the SEC warned Myloan that further infractions could lead to heavier penalties, including the possible suspension or revocation of its certificate of authority.
The Financing and Lending Companies Department also ordered the borrower to settle outstanding obligations under the loan agreement, without prejudice to any restructuring or settlement both parties may reach.
Myloan Lending did not immediately reply to an e-mail seeking comment. — Alexandria Grace C. Magno
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