Students failing to learn debt-control lessons

Updated 2017-08-21 10:01:50 China Daily
File Photo

File Photo

In the past three years, the media has highlighted many stories about college students who have fallen into debt as a result of using peer-to-peer lending platforms. These platforms, many of which are unauthorized and unregulated, are usually based on the internet and have no connection with the established banking system. Many charge exorbitant rates of interest.

In some cases, lives have been damaged and some students have been pushed to commit criminal acts as they seek to repay their debts.

In some cases the results have been more serious and even life-threatening. In April, a sophomore in Xiamen, Fujian province, killed herself because she was unable to repay 570,000 yuan (,448) she had obtained via a peer-to-peer lender, according to reports in Fujian Daily.

Earlier this year, the Inner Mongolia Morning Post reported that about 900 university students in the autonomous region were cheated out of more than 9 million yuan after they signed up for a "promotion" that purported to offer iPhones for 800 yuan, rather than the usual price of about 2,000 yuan. In fact, they had unwittingly applied for loans from a peer-to-peer platform and were quickly pressured to repay the money at high rates of interest.

Now, experts are calling for the sector to be more strictly regulated to prevent abuse.

"Peer-to-peer lending has become a hot topic among college students, but it has turned out to be a social issue, not just a simple financial problem," said Feng Lirong, a prosecutor at the Dongcheng district people's procuratorate in Beijing.

"The market needs urgent regulation because some loans have put students in danger and even led some to commit crimes."

Gangs and fraud

Although there are no nationwide statistics related to criminal incidents linked to peer-to-peer lending, a number of provinces and regions have released data that illustrate the gravity of the situation.

In May, police in Jilin province said they had handled 193 cases related to the issue, busted three gangs and detained 31 people suspected of using the system to defraud would-be recipients.

In one case, a number of suspects are alleged to have defrauded about 100 students at seven colleges of more than 4 million yuan, according to the Public Security Bureau in Changchun, the capital of Jilin. The men urged the students, who were seeking part-time work, to register with an "employment agency" that was actually a peer-to-peer lending platform. The students quickly came under pressure to meet the monthly repayments.

In July, Nanfang Daily interviewed a female student who told how she was pushed to provide nude photos of herself as security for a loan of 3,000 yuan.

"Those reports shocked me," Feng said. "Despite being 18 and older, many students are similar to minors because they lack financial knowledge and are easily cheated."

She added that lax supervision has allowed the peer-to-peer loan market to run out of control.

The first attempt to address the problem came on May 27, when the China Banking Regulatory Commission, the Ministry of Education and Ministry of Human Resources and Social Security issued a notice banning unauthorized loan platforms from engaging in the business, especially those that target college students.

Also in the News

Nicole Kidman Recalls Oscar Glory: Loneliest Time
Showbiz2016/06/16 13:58September 20 2018 09:20:21

Nicole Kidman Recalls Oscar Glory: Loneliest Time

Attending Shanghai International Film Festival, Nicole Kidman talks about her role in "Grace of Monaco".

Labor Day Travel Peak Starts
Also in the News2014/05/01 12:16September 20 2018 09:20:21

Labor Day Travel Peak Starts

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'
Also in the News2014/04/18 13:18September 20 2018 09:20:21

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'

Hollywood star Johnny Depp's speech in the upcoming new film "Transcendence" has been disclosed on Friday, April 11th.

China World Business Sports Showbiz Audio
C4 My Chinese Life The Sound Stage China Revealed Showbiz Video Travel Video
China World Fun Travel Entertainment Sports
Beijing Shanghai Guangzhou
Live Music Opera & Classical Movies Traditional Shows Exhibitions
Learn Chinese:
Chinese Studio Living Chinese Everyday Chinese Just For Fun Chinese Culture Buzzwords