SHENZHEN police recently caught a criminal gang and arrested 12 suspects that had defrauded more than 300 college students. The case involved more than 10 million yuan (US$1.47 million), according to Xinhua News Agency.

A student of a vocational college in Shenzhen surnamed Chen wanted to buy a new mobile phone. He contacted a lender who was engaged in making small loans through a classmate. The lender asked Chen to write an IOU before giving him the money and said Chen could return the money whenever he wanted.

Chen signed the IOU without discussing the details and quickly received 6,000 yuan. However, not long after he got the money, he was told that he would be charged 30 percent in interest every five days. If he failed to return the money on time, the overdue charge would be 500 yuan per hour.

As Chen was unable to return the money by the due date, he was told to borrow more money from other lending companies. Nevertheless, Chen could only get 20,000 yuan if he borrowed 100,000 yuan from the company. The rest would be transferred back to the company as interest, deposit and service payments.

Moreover, the company asked Chen to mail a list of phone numbers and WeChat friends to them in order to urge his relatives and friends to pay his debt.

“I owed them 6,000 yuan at the beginning. But I can’t figure out how much I owe them now, because all of the IOUs are in their hands,” said Chen.

A woman surnamed Wang said her child borrowed 5,000 yuan at the start, but the debt had reached over a million yuan in half a year.

“The lender would threaten us when my child failed to repay the money. As parents, we felt like this was the end of the world,” said Wang.

According to Yuan Chengbin, a police officer from Taoyuan Police Station in Nanshan District, the victims in this case are all college students and their families. “These college students generally lack social experience and knowledge about finance and law. Therefore, they are easy to be tempted and deceived,” he said.

Yuan said the lenders usually find easy targets among college students and then force them to sign a contract before letting them to read it. Additionally, the exorbitant overdue fees are often decided by the lenders, can be charged by the day, hour, or even minute.

(Zhang Yu)