Massive online loan scam busted


  • AseanPlus News
  • Friday, 28 Jun 2019

BEIJING: Police in Lanzhou, the capital city of Northwest China’s Gansu province, cracked down on a large financial scam group, one of the largest cases in its kind in China.

With 200 million yuan (RM120mil) in seed money, the group issued over 3.27 million illegal loans to about 475,000 people from all over the country, gaining 3.14 billion yuan (RM1.88bil) in illegal profits.

The gang developed a mobile phone application called Tiantu, or “Sweet Rabbit” in English, to carry out its operation.

It looked like a food recipe application but after downloading it to the phone, it would turn into a loan lending application.

It illegally obtained access to users’ personal information such as address lists and call records, and used “consumption advance payment” as bait to induce them to borrow money. It also charged high interest at 30% to 50% as the “service charge”.

Since May 2018, the group illegally obtained the personal details of over 11.976 million people. When it was caught by police, it still had arrears of 1.47 billion yuan (RM883mil) that had not been returned and overdue interest of 8.37 billion yuan (RM5bil), said local police.One victim, using the alias Wang Xiaohong, had just started to work and wanted to buy a new phone. She borrowed 3,000 yuan (RM1,800) from the Sweet Rabbit app but only got about 2,000 yuan (RM1,200), as the rest was deducted by the platform as the “service fee”.

Due to a job change, she did not have money to pay back the loan and the interest snowballed. After a few months, her final debt was as high as 150,000 yuan (RM90,170).

To force her to pay the money, the group began to forge naked photographs of Wang and created memorial-style pictures as if she were dead, which they sent to her, her colleagues, relatives and friends through social platforms.

In November, Li Gang, a police officer with the Public Security Bureau of Lanzhou, discovered the scam during a routine online check.

In January, Lanzhou police began investigating and found that from May 2018 to March this year, the main suspect started the group, developed 1,317 apps such as Sweet Rabbit, set up 24 online loan platforms and signed loan contracts with the victims through over 40 shell companies.

A special case group tasked over 400 policemen to operate synchronously in East China’s Zhejiang and Anhui provinces, Northwest China’s Shaanxi province and other places.

They captured 218 suspects and froze assets worth nearly 2.1 billion yuan (RM1.26bil). — China Daily/Asia Network

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