China Banking and Insurance Regulatory Commission: guard against risks or traps hidden behind excessive lending marketing

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Original title: warning about the risk of excessive lending induced by Internet platform
In order to obtain a large number of customers, some online platforms induce excessive consumption through various online consumption scenarios, excessive marketing loans or credit card overdraft and other financial products. In this regard, the Consumer Protection Bureau of China Banking and Insurance Regulatory Commission issued the sixth issue of risk warning in 2020 to remind consumers that they should establish a rational consumption concept, reasonably use lending products, choose formal institutions and channels to obtain financial services, and be alert to the hidden risks or traps behind excessive lending marketing.
One is improper information disclosure, there is a risk of misleading sales. Some organizations or network platforms, when publicizing, unilaterally emphasize the favorable conditions such as low daily interest rate, interest free period and zero interest installment. However, the so-called “zero interest” is not equal to zero cost, and there are often “service charges”, “handling charges” and “overdue charges”. The actual comprehensive annualized interest rate level of interest charges for such products may be very high. Some marketing activities deliberately blur the actual cost of borrowing, which infringe on consumers’ right to know and easily lead to misunderstanding.
Second, excessive packaging marketing, into the blind and unrestrained consumption trap. Some institutions over publicize the concept of borrowing consumption and ahead of time enjoyment in various consumption scenarios. This kind of over marketing and over packaging of loan products is easy to induce unrestrained consumption, especially to mislead people with weak financial knowledge and teenagers without stable income source. The phenomenon of “borrowing money from stars, fans and teenagers” spread after the “star list” and “gift collecting platform”. Blind lending and blind consumption will eventually infringe on the rights and interests of financial consumers.
Third, excessive collection and abuse of customer information, there are risks of improper use and leakage of personal information. Some network platform’s net loan marketing ignores the consumer’s interest, uses the “earth flavor” “the wonderful flower” advertisement to attract the flow, obtains the customer information. In the process of marketing or lending, excessive collection and abuse of customer information through advertising pages, and even transfer of customer information between the platform side, lending institutions and investors without the knowledge of consumers, infringe on the right of consumer information security.
Fourth, disorderly lending leads to excessive debt. Some network platforms claim that the loan procedures are simple, and tempt consumers to click to handle them. Some institutions even make excessive loans to minors, school students, low-income groups, etc., carry out violent collection, pretend to be judicial organs to collect money maliciously, and collect money against the borrower’s relatives and friends, causing a series of family and social problems.
In view of these excessive borrowing and consumption marketing behaviors, the Consumer Protection Bureau of China Banking and Insurance Regulatory Commission reminds the vast number of consumers: we should adhere to the actual demand, establish a rational consumption concept of living within our means, and stay away from the trap of excessive borrowing and consumption marketing.
1、 Rational consumption, living within our means
We should carefully understand the content of loan products. Some behaviors of “loan consumption”, “ahead of time enjoyment” and “loan star chasing” which are excessively publicized in marketing are not worth advocating and imitating. We should have a correct assessment of our own economic affordability and put an end to reckless and blind lending and consumption. Excessive borrowing often leads to the disconnection of funds, which will eventually make consumers and even families in trouble.
2、 Rational use of lending products, do not “support lending by lending” or “multi lending”
There is no free lunch. Consumers should be aware of online platform loans, credit card overdraft and installment loans, and other important information closely related to their own rights and interests, such as loan interest price, term, repayment method, and be wary of the so-called “interest free” and “zero interest” one-sided propaganda of some institutions or platforms. We should give full play to the role of lending products, establish a sense of responsible lending, and do not rely too much on lending consumption, let alone “supporting loans with loans” and “multi lending”.
3、 Choose formal institutions and channels to borrow
We should choose formal institutions and channels to obtain financial services, pay attention to check whether the relevant institutions have business qualifications, and prevent illegal financial activities. We should be alert to unknown phone calls, links and e-mail sales. We should not click unknown links at will. We should not provide important personal information on suspicious websites. We should enhance the awareness of personal information protection and guard against the risk of fraud and personal information leakage.