Shanghai police have apprehended 31 people in connection with 1,300 telecommunication fraud cases with total illegal gains of 4 million yuan (590,000 U.S. dollars).
The gang asked for "brokerage fees" for fake loans, Li Shidong, of the public security department in Shanghai's Jinshan District, said Tuesday.
Police started investigating the case in late March, when a resident surnamed Chen told police he was asked to pay 4,500 yuan via the social networking app WeChat to obtain a loan.
After he made a 4,000 yuan down payment of the brokerage fee, the loan was rejected, with no money returned.
Police found more than 1,300 similar cases had been reported from November 2016 to April 2017, with victims across the country.
With the help of police in Shandong Province, the gang was arrested in late May in Liaocheng City, Shandong.
Twenty of the suspects will face fraud charges, said Li.