Familyhan was found to have contacted persons in the debtor’s contact let other than those named as guarantors or co-makers of the loan agreement in violation of the Truth Lending Act.

It also failed to disclose the net proceeds of the loan to its borrowers.

SEC cited Bangko Sentral ng Pilipinas circular 730, which requires lenders to disclose to all types of borrowers the loan terms including the total amount to be financed, finance charges, net proceeds of the loan and the percentage that the finance charge bears to the total amount to be financed, prior to the consummation of the transaction.

It has so far cancelled the licenses of 35 financing companies due to various violations of rules and regulations.

It also cancelled the certificate of registration of 2,081 lending firms for their failure to secure the requisite certificate of authority pursuant to the Lending Company Regulation Act of 2007.

According to the SEC, 58 online lending applications have been ordered to cease operations for lack of authority to operate.