Online lenders face growing scrutiny as SEC penalizes MyLoan and Global Dominion over abusive collections

The Securities and Exchange Commission (SEC) has issued back-to-back fines against MyLoan and Global Dominion, highlighting a rigorous crackdown on coercive recovery tactics in the Philippines’ digital lending sector.

Two lending companies were fined weeks apart this month for abusive collection practices, drawing sharper attention to how aggressive debt recovery tactics continue to test the boundaries of consumer protection in the Philippines’ fast-growing digital credit market.

Why was MyLoan Lending Investors Inc. fined?

The Securities and Exchange Commission (SEC) recently fined online lending firm MyLoan Lending Investors Inc. ₱50,000 for its second violation of rules prohibiting unfair debt collection practices, warning that further offenses could lead to heavier penalties, including suspension or revocation of its certificate of authority.

The regulator also ordered the company to stop using humiliating, coercive, and third-party pressure tactics against borrowers after an investigation found collection efforts crossed into prohibited conduct.

The case stemmed from a borrower complaint alleging that collection agents sent messages containing shaming language, threats to contact employers and emergency contacts, and repeated outreach to third parties following delayed payments. Regulators said such actions went beyond acceptable collection reminders.

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

The SEC’s Financing and Lending Companies Department (FLCD) found MyLoan administratively liable for violating SEC Memorandum Circular No. 18, Series of 2019, alongside provisions of the Financial Products and Services Consumer Protection Act and related implementing rules. The circular explicitly bans threats, intimidation, obscene language, and contacting individuals outside approved guarantors or co-makers.

While the regulator directed the borrower to settle outstanding obligations in accordance with loan agreements, it emphasized that delinquency does not grant lenders authority to harass or publicly shame borrowers.

Global Dominion faces penalties for roadside intimidation

The MyLoan ruling follows a similar enforcement action issued weeks earlier against Global Dominion Financing Inc., signaling what appears to be a tightening stance against abusive collection behavior across the lending sector.

Global Dominion was likewise fined ₱50,000 after a borrower complained of intimidation by third-party collection agents who allegedly intercepted him on the road to demand payment and sent repeated pressure messages tied to delayed loan payments.

According to the SEC, such confrontations exceeded lawful collection practices.

“Intercepting the borrower on the road in the absence of a court order or other lawful authority is not a legitimate collection practice and has the tendency to intimidate, restrain, or coerce,” the regulator said in its order.

The agency added that companies cannot shift responsibility to outsourced collectors, stressing that financing firms remain fully accountable for the actions of accredited third-party agents acting on their behalf under the Financial Products and Services Consumer Protection Act framework.

Both cases were cited as violations of SEC Memorandum Circular No. 18, which defines abusive collection practices to include threats, intimidation, profane language, reputational harm, and unauthorized contact with individuals in a borrower’s network.

A pattern of tightening enforcement in digital lending

The back-to-back penalties arrive as online and non-bank lending platforms continue expanding rapidly, filling financing gaps left by traditional banks and providing faster access to credit for households and small businesses.

Digital loans have become an increasingly common lifeline for entrepreneurs managing cash flow gaps, gig workers navigating irregular income, and consumers facing urgent expenses. Yet regulators say aggressive recovery tactics risk undermining confidence in the very systems designed to expand financial access.

Consumer advocates have long warned that convenience in loan approval can sometimes be paired with high-pressure collection strategies once payments fall behind, placing financially vulnerable borrowers in stressful situations that extend beyond financial obligations.

The SEC’s actions reinforce a central principle in financial regulation: borrowers remain responsible for legitimate debts, but collection must remain lawful, proportionate, and respectful of consumer rights.

By issuing identical fines and warnings in separate cases within weeks, the regulator is signaling that enforcement will increasingly focus not only on lending practices but also on how companies recover unpaid loans.

A warning to the industry

Although ₱50,000 represents a relatively modest monetary penalty, the accompanying warnings carry heavier implications. Both companies were cautioned that repeated violations could lead to stronger sanctions, including suspension or revocation of operating authority.

The message extends beyond individual firms. As competition intensifies in digital lending, compliance risks are becoming business risks, particularly for companies relying on aggressive third-party collectors to maintain repayment rates.

Each enforcement action highlights a balancing act facing regulators and lenders alike: expanding access to credit while preventing practices that erode consumer trust.

With multiple cases now surfacing within a short period, the SEC’s recent rulings suggest closer scrutiny ahead for collection practices across the lending industry—and a reminder that how debts are collected may matter as much as how loans are granted.

 

 

Two online lenders face ₱50,000 fines in February as the SEC steps up enforcement against abusive debt collection, raising concerns for borrowers and small businesses.

 

 

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