In recent years, a new financial scam in China, under the guise of “debt negotiation” and “suspension of billing,” is rapidly spreading. Especially driven by short video platforms and social media, these scams have attracted a large number of ordinary users struggling with online loans, evolving into a mature financial gray industry chain.
According to a recent investigation by the China Business News, the so-called “debt reduction negotiation” and “billing suspension” services are actually a new type of fraud disguised under the name of “legal assistance,” becoming a popular monetization tool in the current financial gray industry.
One resident of Henan, Zhang Ming (pseudonym), burdened with a 280,000 yuan online loan debt, stumbled upon an advertisement on a short video platform one late night promising “debt reduction assistance without credit checks.” After spending 39.9 yuan to purchase a “legal consultation package,” he was then persuaded to pay a total of 14,350 yuan in service fees by the other party. However, in the end, the platform informed him that the “penalty interest had not been reduced,” and the staff who promised “full negotiation handling” had long been uncontactable.
Such cases are not isolated incidents. According to data from the Sina Black Cat Complaint Platform, as of now, there have been over 1500 complaints related to “debt negotiation” services. The main issues include fictitious reduction promises, forged negotiation materials, and impersonating debt collectors to create a false sense of settlement.
Industry insiders point out that many so-called “law firms” are actually fraud gangs packaged by “legal consulting companies” without lawyer qualifications, selling false hopes under the guise of “negotiation” and collecting what they call “IQ tax” from debtors in distress.
To evade regulation and platform scrutiny, related organizations commonly use slangs like “shoe merchant (negotiation),” “can extend (extension),” and “refund interest refund fees” to package the service content, creating a professional image and deliberately blurring the line with official platforms.
“We can help you defer payment for 3 years, block collection calls, and avoid lawsuits” has become the most common propaganda tactic used by scammers. Once the debtor makes payments and signs the so-called “legal service agreement,” they find themselves in a situation where getting a refund and seeking justice become difficult, and in some cases, their personal information is used for retaliatory collection, causing secondary harm.
Some “negotiation agencies” even engage in forging income certificates, poverty certificates, and other materials to “negotiate” with the platform, not only involving fraud but also potentially leading debtors to unintentionally become defendants in credit card fraud and forgery cases.
In some local court cases, it has been explicitly stated that such “negotiation services” are illegal acts aimed at evading debts and disrupting financial order, resulting in the contracts being deemed invalid. The China Business News discovered through undercover investigations that illicit organizations often use the name of “law firms” to attract clients while the actual operations are carried out by unqualified companies, forming a complete chain from customer acquisition to packaging to operating in the financial gray industry.
According to data released by the security institution “Threat Hunter,” the number of practitioners in China’s internet gray industry reached 5.871 million in 2023, a staggering 141% year-on-year increase, leading to property losses in the range of hundreds of billions.