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SEC revokes license of online moneylender victimizing OFWs

09 July 2021

By Vir B. Lumicao

About 100 OFWs in HK helped put an end to Familyhan's illicit practices

An online lender based in Batangas that overcharged hundreds of overseas Filipino workers and harassed late payers by sending letters to their employers, has been stripped of its license by the Securities and Exchange Commission.

The SEC revoked the license of Familyhan Credit Corp, with offices in Cuenca, Batangas, on Jul 6 for unfair debt collection practices and failing to disclose the true cost of loans extended to borrowers.


Although based in the Philipines, Familyhan offered loans online to overseas Filipino workers, including those in Hong Kong

According to staff at the assistance to nationals section of the Consulate, about 100 OFWs based here filed complaints against the moneylender, which were then forwarded to SEC through the Department of Foreign Affairs in Manila.

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One victim who requested anonymity due to frequent harassment by the lender, said when she borrowed Php30,000 in March last year, her designated beneficiary in the Philippines received only Php26,600, reflecting a Php3,400 “processing fee”.

Her monthly amortization was Php19,500 for two months, which means she should have paid a total of Php39,000, for a monthly interest rate of 34%.

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The victim said she deposited her first monthly payment to a designated BDO account through the bank’s Hong Kong branch before the end of March last year.

But her second installment at the end of April did not get through BDO and remittance companies refused to handle the payment, saying there was a problem with Familyhan’s bank account.

‘Ilang days lang pinadalhan na ako ng sulat dito sa bahay ng amo ko, 2 times a week may sulat akong dumarating at halos triple yung interest nila sa sa inutang ko,” the victim said.  (Within days, they began sending me letters at my employer’s address and the interest they charged on my loan had almost tripled.)


A demand letter dated Jun 21, 2020 stated that the victim owed Familyhan Php38,400, instead of just Php19,500; by Aug 19 it went up to Php56,100, and by January this year it had bloated to Php200,000.

The last letter she received was accompanied by a threat to sue her for estafa, the victim said.

The loan deal for the second borrower shows she borrowed Php20k when only Php18k was given her

In another case, another Filipina domestic worker in Hong Kong said she applied for a Php20,000 loan, but only Php18,000 was sent to her because of a supposed Php2,000 “acceptance fee” that was collected outright.

“Online po nag-apply. Basta ang sinabi ay Php23,000 na pagbalik,” she said. (I applied online. I was only told that I’d be paying back Php23,000.)

She was told that she was to pay back Php23,000 for the unsecured loan within a month, for a 27.7% interest, or 333% in one year. The loan agreement she was given falsely showed the annual interest rate at 180%, which will balloon to 365% for late payments.

Philippine law sets the legal interest rate for a loan in the absence of any stipulation, at 6% per annum. In Hong Kong, it is 60% for a year.

The usurious lending had also reached Singapore, with one Filipina worker there saying she borrowed Php10,000 in March 2019, but received only Php6,000.

The worker was told that Php4,000 was deducted for charges. She was instructed to repay the loan in two monthly installments of Php5,000 each, for a 60% interest.

She later took out a second loan of Php20,000, but was given only Php16,000 to be repaid in two monthly installments of Php12,500 each, or at 64% interest.

Because she failed to pay on time, Familyhan reportedly started charging her Php200 interest for each day of delay, on top of the outstanding loan.

The collectors also sent the debtor two letters in Singapore. The first one sent in November demanded she pay Php68,000. Another came in April but she did not open it and marked it “return to sender”.

“I didn’t have the courage to look at how much the loan had grown,” she said. 

The collectors then started pestering her husband in the Philippines through calls or text messages, telling him to pay up.

The Hong Kong victims said Familyhan had a “collection office” in the city, which took care of writing demand letters to employers threatening legal action against the helpers who could not pay on time. Borrowers were instructed to deposit their payments to a Wing Lung Bank account in the name of the company, "Ownman".

Copy of the demand letter sent to a defaulting borrower 

Helped by the Consulate and a group of migrant support organizations, about 100 victims banded together and wrote separate complaint letters to SEC.

“Different NGOs also assisted, such as Help for Domestic Workers, Justice Without Borders, and (the Facebook group) Help and Support FDWs,” one of the victims said.

In canceling Familyhan’s licence, the SEC said the lending company committed eight violations of Republic Act 3765, or the Truth in Lending Act, in relation to loan transaction transparency.

“Familyhan violated the prohibition on unfair debt collection practices when it contacted persons in the debtor’s contact list other than those named as guarantors or co-makers of the loan agreement,” the SEC said.

Like most online lenders, Familyhan gained access to the borrowers’ contact list through an app that they were told to download.

“Notwithstanding the borrower’s consent, contacting the persons on the borrower’s contact list other than those named as guarantors or co-makers shall also constitute unfair debt collection practice,” the SEC said.

Familyhan was also found to have violated SEC’s circular ordering money lenders to disclose the net proceeds of the loan to its borrowers.

The SEC rule implemented a Bangko Sentral ng Pilipinas circular requiring 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, before the transaction is finalized.


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