On the afternoon of 3 September, the Gaoping District Bureau Public Security Bureau of Nanchong City arrested 37 staff members, with a further 39 being taken in for questioning, for the illegal running of small loans companies, and the issuing of so-called “lunch loans”.
A woman from Nanchong City in China’s Northwestern Sichuan Province, surnamed Li, found herself somewhat strapped for cash and unable to borrow, due to bad credit and a less-than-good reputation among her friends. She ended up instead walking into a“loans building”, which she had learned “could provide loans for people like her”.
Initially borrowing ¥8,000 from one company, she was later unable to pay the money back, so the company advised her to continue lending from other companies in the same building. After 5 months, Li owed a total of ¥50,000 to various loan companies, reported Sina News.
According to Li’s husband, in order to retrieve the debt, the company began violently harassing the family at their home and via phone, until they escorted Li back to the offices, where it is reported she was held prisoner for 5 days and nights.
Multiple efforts by her husband to try and negotiate a deal on her behalf failed. Not knowing what to do, Li’s husband later called the police.
Around the end of 2017, the Nanchong City Public Security Bureau of Gaoping District received a call from Li’s husband stating his wife had been illegally detained for 5 days and nights by the staff of a loans company.
After rescuing Li from the loans office, police launched an investigation and found that in the two buildings they looked at downtown, there were more than 100 small loans companies that have “been engaged with information consultation activities that are inconsistent with the license”, reporters from Cover News wrote.
“They sign a false contract, and the amount is much higher than the amount of the [initial] loan; the [person borrowing the money] is not aware of the terms of the contract, and the contract will be taken away after its signed”, Ma Yuhai, deputy head of the Criminal Investigation Brigade, said to Cover News.
“They claim to be a loan company and sign a service with the [client] and disguise as an intermediary company.” When the client is [then] unable to repay, it will be introduced to other small loan companies and enters a vicious circle.
