Economic Observer reporter Lao Yingying

Mr. Chen, who works in an office building in the Pearl River New Town, Guangzhou, told the Economic Observer that the loan company he worked for was investigated by the police a few days ago. Mr. Chen claimed that he worked at this loan assistance company for nearly two months due to difficulties in finding a job, but did not secure any business orders during this period; Moreover, when he had been working for half a month, he had already learned that other companies engaged in loan assistance business in the same office building had been investigated by the police as early as the end of August.

In fact, according to the reporter's understanding, loan assistance companies involved in "black and gray industries" in many parts of China, such as Guangzhou, Foshan, Chengdu, and Chongqing, have become key targets of crackdown by public security organs recently. Li Yang, a senior partner lawyer at Zhejiang Weiya Law Firm, also told Economic Observer reporters that according to his understanding, public security organs in many places are concentrating on investigating cases of such loan assistance companies, covering Beijing, Shanghai, Jiangsu, Zhejiang and other places. Many places in Zhejiang Province are also simultaneously carrying out related investigations and arrests.

The reporter learned from the interview that these informal loan assistance companies often rent office space in high-end office buildings in various commercial districts, and their signs often only indicate words such as "Contract Signing Center" and "Personal Loan Business Service Center", without displaying the complete company name. Some stores may seem luxurious in decoration, but the interior furnishings are very simple, equipped with only a small number of computers, and there are not many employees on duty. They will fabricate loan processing conditions and make false promises, such as claiming low interest rates, high credit limits, and promoting slogans such as "zero rate" and "no collateral". However, in actual processing, borrowers not only have to bear high interest rates, but also are charged various fees such as deposits and service fees.

During the interview, the reporter also found that some informal loan assistance companies adopt the "AB loan" model (where the actual borrower and the nominal borrower are different) and charge high service fees for it. In addition, some lending assistance institutions also engage in the act of assisting in forging application materials, which poses a risk of loan fraud.

Suspected Of Fraud

Mr. Chen stated that based on his understanding, the loan assistance companies that were previously investigated in the same office building were all engaged in "AB loan" business, and he had not worked in the loan industry before and was not familiar with the industry situation. He thought that companies that did not engage in "AB loan" business were legitimate loan assistance companies. But he said he was not aware of why his company was investigated.

The so-called "AB loan" refers to the situation where the actual borrower A lacks qualifications and is unable to independently apply for a loan. Under the guidance and deception of loan assistance intermediaries, they seek a third party B with good credit conditions as a nominal borrower to apply for credit funds and hand over the funds to the actual borrower for use. In this mode, if A is unable to fulfill its obligations, B will assume full repayment responsibility.

The reporter learned from the interview that most of B is A's relatives and friends, and the loan assistance agency will not directly let B borrow money, but will deceive B by saying that they are only acting as guarantors, witnesses, repayment supervisors, or just "brushing their face to increase trust". Subsequently, loan assistance intermediaries often falsely claim to B that insufficient credit enhancement requires both parties to bundle loans or joint loans in order to process. Afterwards, the loan assistance intermediary borrows money from the bank in the name of B, charges a service fee after the loan is disbursed, and then transfers the money to A. If A is unable to repay the loan in the future, B will be forced to bear the debt.

Li Yang told reporters that starting from the second half of 2025, individual informal loan assistance companies will be investigated and dealt with in various regions. But at that time, the amount involved in the case was relatively small, and the companies that were mainly investigated and dealt with were those with more related reports and stronger feedback from victims. According to his understanding, the loan assistance case in Shangcheng District, Hangzhou on March 26, 2026, was an early concentrated crackdown operation, with a large number of people arrested and a significant amount of money involved.

Li Yang said that the truly large-scale concentrated crackdown only emerged after the launch of relevant special actions in 2026. In April, the Ministry of Public Security and the State Administration of Financial Supervision and Administration jointly deployed a new round of crackdown on illegal criminal clusters in the financial sector, specifically targeting illegal loan intermediaries, loan assistance institutions, and other entities.

On April 22, the State Administration of Financial Supervision and Administration of China announced that the 2026 Inter Ministerial Joint Conference on Preventing and Combating Illegal Financial Activities and the Mobilization and Deployment Meeting for the Overall Campaign to Prevent and Combat Illegal Financial Activities were held in Beijing. The meeting decided to launch a three-year overall campaign to prevent and combat illegal financial activities starting from 2026.

In fact, besides "AB loan", there are many "tricks" of informal loan assistance companies. A woman who has stepped into the "pit" of a loan assistance company told reporters that she entrusted a loan assistance agency to handle business due to her need for capital turnover. The agency's language was highly persuasive and easy to persuade in the early stages, but later on, it was discovered that it was all a "trick". For example, the loan assistance company she contacted claimed to be able to package documents, use internal expedited channels, and even claimed to have "approved packages", ignoring the actual qualifications of customers. However, before the loan is disbursed, they need to charge hundreds of yuan for document fees and expedited fees. Due to a lack of relevant experience, the woman directly paid for the document fee and expedited fee. However, after the payment was made, the other party's attitude suddenly changed and their response was delayed. Eventually, they informed her that the approval failed due to a lack of qualifications, and the early payment fee would not be refunded. In addition, the woman also claimed that during the process of contacting the loan assistance company, she submitted multiple bank applications in bulk, resulting in a surge in credit inquiries.

Li Yang told reporters that the relevant loan assistance companies were investigated mainly for suspected fraud. Simply engaging in loan assistance intermediary business does not constitute a crime in itself, the main problem lies in the process of conducting business. Some loan assistance companies, in order to quickly acquire customers or charge high commissions, may fabricate their cooperation with banks to quickly approve loans, increase loan amounts, or obtain lower loan interest rates. But in reality, they do not have these special cooperative relationships with banks, and many loans are applied for by customers through public channels.

Li Yang further stated that when charging fees, such informal loan assistance companies may also fabricate various fee names, such as margin, bridge fees, credit repair fees, etc. Some even conceal the true interest rates and even apply for loans by making false materials. If the relevant loan assistance company makes false promises to mislead loan applicants into thinking that they can enjoy the corresponding loan services by paying money, and ultimately deceives applicants into paying the relevant fees, it may be suspected of fraud.

Still committing crimes against the wind

According to the reporter's understanding, against the backdrop of vigorous rectification by relevant departments, there are still many loan assistance companies that "go against the wind and commit crimes". Currently, they are still operating in violation of regulations and even upgrading the "AB loan" model, with more covert operating methods.

A man from Jiangsu told reporters that in October, a friend of his needed an emergency contact person when applying for a loan due to poor credit information. The loan assistance company repeatedly assured him that he only acted as an emergency contact person, did not need to sign, and was not a guarantor, so he agreed to go to the company. After he arrived, the relevant employees of the loan assistance company verified his ID card and social security information, claiming that it was for querying personal big data scores. They then arranged for other personnel to submit loan applications in his name on the bank's mobile application, and asked him to take ID photos and complete facial recognition. Although the relevant employees of the loan assistance company claimed that the operation was only a big data scoring verification, he had already suspected that the scoring was a loan qualification review, and after the scoring was passed, the loan would be registered under his name. Fortunately, the review did not pass, and the agent immediately requested to change to another plan. He refused on the spot and left.

A female borrower from Sichuan also told reporters that in mid October, she consulted a local loan assistance company about loan related business. The company's employees first accompanied her to print a paper credit report and collect personal information such as housing provident fund and social security. Later, they informed the borrower that her credit qualification was still acceptable, but she had more credit inquiry records. She could still apply for a bank product with an annualized interest rate of 3.2%, but the loan assistance company would charge a service fee of 7%. The borrower raised objections to this, while the employees of the loan assistance company claimed that they are cooperating with the bank and the service fee needs to be distributed to relevant personnel of the bank.

The borrower, in a hurry to use the money, subsequently agreed to handle it and signed a contract with the loan assistance company. Subsequently, accompanied by relevant personnel from the loan assistance company, I went to the bank to apply for a loan and withdrew 60000 yuan. The loan was successfully disbursed in just over ten minutes. The woman saw frequent interaction between the loan assistance company personnel and bank staff at the bank branch, and felt that the two were very familiar. After going through this process, the parties believed that the loan assistance company did indeed have a cooperative relationship with the bank, and agreed to pay service fees to the loan assistance company. Afterwards, a friend reminded her that these loan assistance companies were not cooperating with banks. As long as she understood the loan conditions of the bank in advance and matched them according to her own loan requirements, she could apply for the loan without paying any additional service fees.

The above-mentioned interviewees stated that the threshold for setting up such loan assistance companies is not high. They only need to rent office space in high-end commercial districts, recruit a small number of employees, and purchase basic office equipment to operate. Once a problem is felt, the operator can quickly "run away" and lose contact, or change the name of the operating entity and resume operations. It is precisely because the establishment threshold is low that such institutions are prone to resurgence.

Although the threshold for establishing such companies is not high, the investigation work becomes very complex once the case enters the investigation stage. Li Yang told reporters that if there are a large number of people involved in cases related to loan assistance companies, the public security department needs to investigate the business situation, capital flow, and number of customers of each employee, and also distinguish the responsibilities of different personnel, making the investigation difficult. Some cases may take six or seven months from criminal detention to formal transfer to the procuratorate for review and prosecution.

According to Li Yang's understanding, the early "3.26" loan assistance project in Hangzhou has only just entered the stage of the procuratorate, and there is no clear sentencing result yet. As for the cases handled after the new round of concentrated crackdown in 2026, many are still in the stage of public security investigation and have not yet entered the substantive sentencing negotiation process.

In terms of specific sentencing, Li Yang stated that it is necessary to make a comprehensive judgment based on the actual work content, business participation level, role played by the involved personnel, and the final amount of fraud determined. For company owners, actual controllers, and core management personnel involved in business decision-making, the punishment may be relatively heavy, because for fraud crimes, a fraud amount of more than 500000 yuan is considered a particularly large amount, and can be sentenced to more than ten years of imprisonment or life imprisonment according to law.

(Author Lao Yingying)