In order to ensure that debts are repaid in time, Chinese loan sharks are now asking female university students for nude pics as collateral.
The matter was brought to national attention earlier this week when a victim of the scheme — a university student going by the pseudonym of Li Li — sought help from police. According to the woman, a loan shark group granted her a 500 yuan loan in February with a weekly interest rate of 30%. Unable to pay it back, the loan was rolled over week after week and soon it had inflated beyond 10,000 yuan.
The online lending platform that Li used requires borrowers to hand in photocopies of their identity cards, student cards and family data before a loan is granted.
At a certain point, the lenders refused to renew her loan unless she also provided a nude photo of herself holding her ID card. Li reluctantly complied.
Her debt spiraled out of control, inflating to 55,000 yuan in four months. At that point, she finally went to the police with her parents. Li said that she knew of many other schoolmates who have also fallen victim to the same trap, but dare not speak out.
“If you don’t pay by the end of this month, the pic will go public,” the lender said in the chat group.
Li told reporters about the loan-offering chat groups on QQ, where the loan sharks operate. One reporter then posed as a young female student and requested a loan with nude pics as collateral. In two hours, the reporter was approached by no less than five lenders, Southern Metropolis Daily reports.
According to a piece of commentary from the Beijing News, the 30% weekly interest rate in Li’s case clearly exceeds the maximum interest rate of private loans under Chinese law. Taking nude photos as collateral is also illegal.
By Victor Fung
[Images via Southern Metropolis Daily]