A mobile app named Tongcheng Finance has recently been removed from a large number of app stores, after China Central Television exposed it as a loan shark on Friday.
The State-run broadcaster holds an annual gala on March 15, the World Consumer Rights Day, to expose business practices that have violated consumer rights and disrupted the market.
According to the 315 Gala, Tongcheng Finance app allows its users to buy a digital "gift package" now and pay for it a month later. After purchasing, consumers can immediately get cash by selling the gift cards included in the package back to the app.
However, Tongcheng Finance takes the gift cards back with six percent off and the other products included in the "gift package" are either useless or sold at prices much higher than their actual value.
A customer surnamed Li said he received just over 28,000 yuan ($3,891.4) in cash but had to make a repayment of more than 40,000 yuan a month later for buying a "gift package", which confirmed Tongcheng Finance's loan sharking behavior.
Li is not the only consumer whose rights have been violated by the predatory loan app. There has already been a total of 36,755 complaints about Tongcheng Finance on a customer complaint platform.
After being exposed by CCTV, the app's operator – Shanghai Lyuji Science and Technology Co – released a statement late on Friday, claiming that it will immediately take the products in question offline and check all of its products for compliance with market rules.
Relevant authorities had issued a document strongly urging the rectification of cash loan platforms that raise interest rates through tie-in sales or fake shopping services.
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