SEC En Banc Case No. 07-23-002In the matter of: SURITY CASH LENDING INVESTORS CORP. WITH ONLINE LENDING PLATFORMS OPERATING UNDER THE NAME OF SURITY CASH

Securities and Exchange Commission COMMISSION EN BANC Republic of the Philippines Department of Finance

In the Matter of: SEC En Banc Case No.07-23-002

SURITY CASH LENDING For:Violation of SEC MC No.18,s. (FLCD CD0 Case No.24,s.2023)

INVESTORS CORP. WITH 2019, Financial Products and

OPERATING UNDER THE NAME ONLINE LENDING PLATFORMS OF SURITY CASH and its Implementing Rules and Services Consumer Protection Act Regulations, Lending Company

Regulation Act of 2007,and SEC MC No.19,s.2019 Promulgated:16 November 2023

RESOLUTION

to Lift") filed on 04 July 2023 by Surity Cash Lending Investors Corp., doing business under the name "SurityCash" (Surety Cash Lending), CDO") issued by the Commission's Financing and Lending Companies praying that the Cease and Desist Order dated 26June 2023(the Assailed Division (FLCD) be lifted, the dispositive portion of which reads: This resolves the Motion to Lift Cease and Desist Order (the "Motion

immediately CEASE AND DESIST from engaging in, carrying out, any transaction." branches, extension, satellite offices, units, and online lending unfair debt collection practices in connection to any lending activity/ platforms, together with its owners,operators,promoters, representatives, agents AND ANY AND ALL PERSONS CLAIMING AND ACTING FOR AND IN THEIR BEHALF, are hereby ORDERED to "WHEREFORE, Surity Cash Lending Investors Corp. including its

the 11th floor of trade Ave Coherco Financial Tower, Ayala Alabang Philippine laws, having been issued a Certificate of Incorporation with Company Registration No. CS201910185. Its principal office address is at Muntinlupa City. It operates its lending business through the platform "SurityCash" which is available/accessible on Google Playstore. Surity Cash Lending is a corporation organized and existing under

Cash Lending to immediately cease and desist from engaging in, carrying On 26 June 2023,the FLCD issued the Assailed CD0 directing Surity

In the Matter of: Surity Cash Lending Investors Corp SEC En Banc Case No.07-23-002 RESOLUTION Page 2 of 7

out, any unfair debt collection practices in connection to any lending September 2022 to March 2023, Surity Cash Lending employed abusive collection or debt recovery practices as shown by the numerous Protection Act (FCPA) and Memorandum Circular No.18,series of 2019 (MC 18). Specifically, the FLCD found that within the period covering complaints received by it. activity/ transaction, on the basis of a finding that it violated R.A. No. 11765 otherwise known as the Financial Products and Service Consumer

to financial consumers in their entirety; and (c) there is no substantial commission of illegal and unfair debt collection practices by Surity Cash Lending.1 Assailed CDO be reconsidered and lifted based on the following grounds: debtors were afforded due process in ventilating their claims; (b) these claims cannot be said to cause grave and irreparable injury or prejudice evidence shown in the Assailed CDO which would establish the (a) the claims against it only involve five (5) cases whereby the client- On 04 July 2023, Surity filed the Motion to Lift praying that the

Surity Cash Lending has violated FCPA and MC 18, a fact that it impliedly borrowers under existing jurisprudence.3 The FLCD also argued that the admitted.4 of merit and basis. The FLCD contended that the continuous receipt of employing abusive collection or debt recovery practices; and the same suffices to cause grave and irreparable injury or prejudice to the number of complaints constitutes substantial evidence showing that for the denial of the Motion to Lift on the ground that the same is bereft complaints against Surity Cash Lending shows that the latter is actively On 17 July 2023, the FLCD filed its Comment/0pposition, praying

their respective Position Papers, essentially reiterating their previous arguments. On 01 and 08 August 2023, Surity Cash Landing and FLCD filed

evidence presented by the parties in support of their respective positions, this Commission finds the Motion to Lift bereft of merit and basis. On the basis of the foregoing factual backdrop, as well as the

2 190 complaints received covering the period September 2022 to March 2023 4 Ibid. Pars. 5 and 6. 3 Comment/Opposition. Par. 4 (a) and (b) 1 Motion to Lift, Par. 4.

In the Matter of: Surity Cash Lending Investors Corp SEC En Banc Case No. 07-23-002 RESOLUTION Page 3 of 7

The Assailed CDO was issued on the basis of the following evidence

and debt recovery practices in violation of the FCPA and MC 18: (1) copies of the numerous complaints received which claimed that Surity Cash which showed that Surity Cash Lending is employing unfair collection

Lending imposed and charged high processing fees and interest rates

Data Privacy Officer of Surity Cash Lending stating the names of the language which demeaned and threaten borrowers, and violated the the CGFD against Surity Cash Lending; and (3) Certification issued by the collection specialists who handled the accounts of the complainants implemented unreasonable terms and conditions,used foul and offensive right to privacy of its debtors;(2) Copies of Show cause Orders issued by

which have either resigned, was terminated or currently under investigation.

ninety (190) complaints that were filed with the FLCD against Surety Cash Lending between September 2022 and March 2023, and seventeen Relative to the foregoing, We specifically note of the one hundred

(17) complaints between April and June 2023.While it might be true that

gravity of the violation which Surity Cash Lending is continuously complaints, the totality of the complaints discloses the seriousness and carrying out with impunity. only five (5) claims have, as of this moment, ripened into formal

Rule 8 Section 4.4 of the SEC FCPA IRR provides:

XXX "Sec. 8. Duties and Responsibilities of Financial Service Providers.

employing abusive collection or debt recovery practices against their financial consumers." (d) xxx Financial service providers are prohibited from

which are prohibited and penalized: Section 1 of MC 18 enumerates the unfair collection practices

b. The use of threats to take any action that cannot legally be c. The use of obscenities, insults, or profane language the a. The use or threat of use of violence or other criminal means to harm the physical person, reputation, or natural consequence of which is to abuse the borrower taken; and/or which amount to a criminal act or offense under property of any person;

applicable laws:

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d. Disclosure or publication of the names and other personal

information of borrowers who allegedly refuse to pay debts,except as may be allowed under Section 2 hereof; e. Communicating or threatening to communicate to any

be known to be false,including the failure to communicate person loan information which is known or which should

under Section 2 hereof; that the debt is being disputed, except as may be allowed

f. The use of any false representation or deceptive means to

collect or attempt to collect any debt or to obtain information concerning a borrower; and g. Making contact at unreasonable/inconvenient times or

or after 10:00 P.M., unless the account is past due for more hours,which shall be defined as contact before 6:00 A.M. than fifteen (15) days, or the borrower has given express consent that the said times are the only reasonable or

h. Notwithstanding the borrower's consent, contacting the Such consent which shall be evidenced by written, electronic or recorded means, may be given prior to during, or after the execution of the loan agreement. convenient opportunities for contact.

who were named as guarantors or co-makers shall also persons in the borrower's contact list other than those

constitute unfair debt collection practice.5

controverted the evidence presented by the FLCD. and Section 1 of MC 18 when it threatened, disclosed personal FLCD.7 The requirement of substantial evidence is satisfied where there is reasonable ground to believe that the respondent is guilty of the act or information,violated the pricy of, insulted, and harassed its borrowers.6 These complaints constitute substantial evidence which jurisprudence considers as sufficient to support the conclusion/finding made by the omission complained of, even if the evidence might not be overwhelming. There is nothing in the records of the case which disclose that Surity Cash Lending actually violated Section 8 of the FCPA The complaints which the FLCD submitted in evidence will readily

6 Comment/Opposition. See Annexes "E" to "F" 7 "The quantum of proof in administrative proceedings necessary for a finding of guilt is substantial evidence or such relevant evidence as a reasonable mind may accept as adequate to support a dismissed for lack of merit if the complainant fails to show in a satisfactory manner the facts upon which his accusations are based." (NBI vs Najera. G.R. No. 237522. June 30, 2020) 8 Diaz v.Ombudsman,G.R.No.203217 conclusion. The burden to establish the charges rests upon the complainant. The case should be Id 1

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Interestingly, what the records show is an implied admission made by Surity Cash Lending that it employed abusive collection and debt recovery practices. However, Surity Cash Lending maintains that the issuance of the Assailed CDO against it is unwarranted because it afforded its clients due process and is already addressing the same,thus:

"These claims only total to five (5) cases, whereby the client- debtors were afforded due process in ventilating their claims. SURITY has also been diligently following up each complaint and has been exerting its best and utmost efforts to coordinate with the complainants; xxx" (Emphasis supplied)

clients due process, and is taking proactive steps to address their complaints does not negate the fact that it had already violated the FCPA The allegation made by Surity Cash Lending that it afforded its

and MC 18.

Officer, Precious Danel De Asis, to constitute another admission that Moreover, We also find the Certification issued by its Data Privacy

collection and debt recovery practices. Its statement therein that the Surity Cash Lending, through its employees, has employed abusive

collection specialists who dealt with and handled the accounts of the

of Surity Cash Lending, the latter is bound by such actions. Under this fact that its employees, who are its agents and representatives, have employed abusive collection and debt recovery practices. complainants have either resigned, terminated, or are currently under investigation is an admission that its agents have violated the FCPA and MC 18. Considering that such employees acted for, and in representation perspective,the Collection Guidelines and the Service Agreement which Surity Cash Lending submitted in evidence will not operate to negate the

employers from the wrongdoing of their employees, thus: Court of Appeals,10 where the Supreme Court ruled that in the interest of protecting the general public, the fact that policies and guidelines on the conduct of business are in place does not automatically exempt The foregoing finds support in Metro Manila Transit Corporation v.

him out to the public as such cannot be permitted to deny the authority of such person to act as his belief that he is what he appears to be." In an agency by estoppel, "the principal is bound by the acts of holds the agent out to the public as possessing." (San Miguel Corporation vs Leonara Vda De Trinidad; agent, to the prejudice of innocent third parties dealing with such person in good faith and in the honest 10 G.R. No. 104408 (1993) his agent with the apparent authority which he knowingly permits the agent to assume, or which he see Concurring Opinion of J. Caguioa. G.R. No. 237506, July 28, 2020) 9 The Court has held that "one who clothes another with apparent authority as his agent and holds

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"We emphatically reiterate our holding, as a warning to all

incumbent upon petitioner to show that in recruiting and policies on safety without showing that they were being liability arising from negligence of its employees. It is employers,that "(t)he mere formulation of various company complied with is not sufficient to exempt petitioner from

employing the erring driver the recruitment procedures and

followed." Paving lip-service to these injunctions or merely company policies on efficiency and safetywere

warrant stern sanctions from the Court." (Emphasis supplied) going through the motions of compliance therewith will

the acts or omissions of their employees, agents, and service providers.11 Considering that the fact of violation by the employees and agents of the argument that it cannot be held responsible/liable for such violation because it already addressed the complaints of its clients, is clearly Without basis. which expressly makes Financial Services Provider solidarily liable for FCPA and MC 18 has already been established, Surety Cash Lending's Finally, this Commission is cognizant of the provision in the FCPA

public is protected in a manner that is envisioned under the FCPA and MC lift the Assailed CDO. On the contrary, after a thorough and scrupulous review of the evidence on record, this Commission is convinced that the Assailed CDO should be made permanent to ensure that the consuming 18 On account thereof, this Commission finds no compelling reason to

and Desist Order filed by Respondent Surity Cash Lending Investors, Corp. is hereby DENIED for lack of merit. The CEASE AND DESIST ORDER dated 26 June 2023 issued against Surity Cash Lending Investors, Corp. is hereby made PERMANENT. WHEREFORE,premises considered,the Motion to Lift the Cease

website, published in a national newspaper of general circulation, and Let a copy of this Resolution be posted on the Commission's

11 Section 13. Liability of a Financial Service Provider on the Acts or Omission of its Authorized Representatives.- The financial service provider shall be responsible for the acts or omissions of its directors, trustees, officers, employees, or agents in marketing and transacting with financial consumers for its financial products or services. The financial service provider shall be solidarily liable with accredited third-party service providers for their acts o which may include, but not limited to, debt collection, with financial consumers for its financial products and services. or omissions in marketing and transacting.

In the Matter of: Surity Cash Lending Investors Corp SEC En Banc Case No.07-23-002 RESOLUTION Page 7 of 7

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furnished to all operating departments and offices of the Commission for their information and appropriate action.

SO ORDERED

Makati City, Philippines.

EMILIO B.AQUINO

Chairperson

JAVEY PAUL D. FRANCISCO Commissioner KEWMN LESTER K.LEE Commissioner

KARLO S.BELLO* MCJILL BRYANT T.FERNANDEZ

Commissioner Commissioner

*On Official Business