In March 2016, Wang got a 500 yuan loan online. Later, she got loans from 22 different lending platform online and totally signed 44 contracts of principal and interest. Although she robbed Peter to pay Paul, the 500 yuan loan snowballed to 280000 yuan, while the online lending platforms continue to abuse Wang and even threaten to send Wang’s nude photos to the people around her. In March 2019, Wang chose to call the police. On June 19th, the five suspects were sent back to Xinjiang province under escorted by Changji polices from Guangdong Province, for which it is the first trans-provincial “trick on usury” case.
The regulation about several issues on handling the criminal cases of “trick on usury”, jointly issued by the Supreme People’s Court, the Supreme People’s Procuratorate, the Police Office and the Ministry of Justice, stipulates the necessity of accurately grasping the differences between “trick on usury” and private lending:
“trick on usury”, is a recapitulatory appellation that for the purpose of illegal possession, someone induce or force the victim to sign relevant agreements such as ‘borrowing’ or disguised ‘borrowing’, ‘mortgage’, ‘guarantees’ and so on, under the guise of private lending. Then, the false credits and debts are formed by means of falsely increasing the amount of loan, maliciously creating breach of agreement, arbitrarily affirming breach of agreement, destroying or hiding evidence of repayment, And the lending platform may illegally possess the victim’s property by means of litigation, arbitration, notarization or violence, threat as well as other means.
There is essential difference between “trick on usury” and true private lending, the later is based on the equal party’s autonomy of will. In private lending, the lender is aimed at recovering the principal and gaining interest according to the agreement at the end of it, without the aim of illegally possession. The lender also won’t falsely increase the amount of loan, falsely fabricate payment traces, maliciously create breach of agreement, arbitrarily affirm breach of agreement, destroy or hide evidences of repayment, when signing or executing a loan agreement.
In judicial practice, we should pay attention to the difference between the cases caused by illegal dun and the cases of “trick on usury”. If the suspects or defendants do not have the purpose of illegal possession, and do not use tricks to form false credit and debt, their behaviour shall not be regarded as“trick on usury”.Those who use violence, threat or other means to demand repayment of a loan may constitute a crime, shall be punished and bear the punishment pursuant to specific facts of the case.
Taking this case as an example, the lending platform called Wang’s mother day and night, as well as repeatedly insulted and even threatened to send nude photos of Wang to people around her, which is the typical way to use violence, threat and other means to dun.
In practice, the common criminal methods and steps of “trick on usury” include but are not limited to the following:
First, create the illusion of private lending. The suspects or defendants often advertise in the name of ‘small loans company’, ‘investment company’, ‘consultancy’, ‘guarantee company’, ‘lending platform online’ and so on. They may also lure the victims to borrow money with low interest rate, no mortgage, no guarantee, rapid loan, and then lure the victims with false reasons such as ‘margin’ and ‘industry regulation’ to sign the ‘loan’ agreement or related agreement with an inflated amount based on the wrong understanding. Some suspects and defendants will force the victim to sign a ‘loan’ agreement or related agreement with an inflated amount, claiming that the victim breached the agreement previously.
Second, fabricate false payment facts such as fund drift. The suspects and defendants transfer the false artificially increased amounts to the victim’s account which for making the trace of fund drift that they had performed the payment. After that it have to be reformed all or part by various means for which the victims actually do not obtain or not completely obtain the loan agreed upon in an contract as well as shown on the fund drift.
For example, the lender borrows 100,000 yuan from the borrower, and the borrower requires the lender to sign several blank contracts. Then the borrower transfers 300,000 yuan to the lender but asking the lender to transfer the additional 200,000 yuan to the third party, which is called fabricating fund drift.
Third, deliberately create a default or arbitrarily affirm the default. Suspects and defendants often intentionally cause the victim’s default by setting default traps, creating repayment obstacles, force the victims to pay false debts by arbitrarily confirming the default.
Intentionally creating default: for example, on January 1st, 2019, one person used his SUV as collateral to borrow 80,000 yuan from a loan company for three months. In February of the same year, when the person wanted to repay money, he found that the company had moved away. Until June, the company suddenly contacted him and said that the SUV as collateral had been transferred because of his overdue payment, and he had to pay 130,000 yuan which includes 80,000 yuan loan, overdue penalty, parking fee and another fee, for getting his SUV back.
Fourth, maliciously increase the loan amount of money. When the victims are unable to repay, some of the suspects and defendants will arrange the owned companies, or some relevant designated companies or related personnels to pay the ‘loan’ for the victims . Then, they will sign an loan agreement or related agreement for a larger amount of money with the victim, and increase the ‘debt’ by the aforementioned way of substitute payment or repaying loan with loan.
For example, in this case, Wang was gradually unable to repay the principal balance and interests, so the loan platform staff recommended another loan platform under its name to her and urge her to borrow money again to repay the previous owed principal and interest. Thus, Wang fell into one trap after another, deeper and deeper.
Fifth, demand repayment of a loan combining harsh and mild measures. When the victims are unable to repay the falsely inflated ‘loan’, the suspects and defendants will ask the victim or the victim’s specifically related persons for the ‘debt’ by means of litigation, arbitration, notarization or violence, threat as well as other means.
If you plan to borrow money online for buying an ipad or things, but you are afraid of being caught in “trick on usury”, you can choose to consult a lawyer, who could help you better understand the issues about principal balance and interests, distinguish “trick on usury”from true private lending, to keep you from falling into one “trick on usury” after another.
