Web-based loan sharks in China are asking female university students who want to borrow money to them nude photographs of themselves as collateral.
Private lenders in the country are asking young women to provide the nude photos of themselves holding copies of their identification cards. They warn the girls that if the loans are not repaid on time the pictures will be made public. Once the photos are received, the girls become eligible for higher amounts of student loans, two to five times the normal amount.
According to one female borrower, she initially borrowed $98 from an online loan provider, which came with an interest rate of around 30%. Because of the high rate, she was forced to take out even more loans to pay off the original loan, causing her debt to reach $10,800. It was then that the provider demanded she give a nude photo of herself as a guarantee for the new loan.
While she did eventually ask her family to help her pay back the loan, she said she is still afraid that the lenders will release the photos anyway.
She went on to say that she knew a large portion of her female classmates that were also involved in the "loan-for-porn" scheme but did not want to speak out.
She is planning to report the incident to the police.
A reporter for the state-run Southern Metropolis Daily was able to gain evidence that the loan sharks ask for nude photos by posing as a potential client and joining online chat groups that the lenders tend to visit. The reporter discovered that the sharks are not only asking for photos, but also for personal information about the borrower, such as phone numbers, ID numbers, home addresses, parents' names, contacts for roommates and student registration information. The lender threatens to make the information public, as well as the photos, if the payments are not made on time.
State media notes the scheme is taking place on the JD Capital's Jiedaibao website. The site is a platform that allows individuals, mostly friends or acquaintances, to lend or borrow money through their own private arrangements, reports Stuart Leavenworth for The Guardian.
As of the middle of the week, the stories about the lenders had created an influx of thousands of comments on social media sites and other websites across the country. Many of the comments spoke out against the practice, while others pushed for intervention from regulators, writes Chris Stevenson for The Independent.
"These kinds of loans are like opium," wrote one commenter on Weibo, China's main social media platform. "Why does the regulatory authority neglect it?"
Others had less sympathy for people who engage in online lending. "Are they deserving of sympathy? No, they aren't," one wrote. "You should spend the money you are able make. Why you spend the money that you have no ability to earn?"
After the story was originally published, the newspaper reported that the sharks stopped participating in the practice.