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These Companies are Taking Nude Selfies as Collaterals for Loans

(Mir Suhail/News18 Creative)

(Mir Suhail/News18 Creative)

“Naked loan services” are being offered by Chinese e-commerce startups to students looking for ways to supplement their income.

Shantanu David
  • Last Updated: November 30, 2018, 4:36 PM IST
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While in the days of yore, poor poets had to sing for their supper. Today’s equally impecunious students have to get loans to be able to afford theirs (along with college tuitions, living expenses and sundries). Education, especially at tertiary levels, has become a business so booming that one could say it’s becoming a racket and nowhere is that more apparent than in countries with the world’s highest populations.

And while students in all three of the top three nations (China, India and the US) are fair game to predatory loans thanks to burgeoning fees of colleges as well as excessive competition, the Chinese are now facing an even more unpleasant reality, which is rapidly becoming the only viable option for many impoverished young people.

VICE Australia recently reported on a growing trend of “naked loan services” being offered by Chinese e-commerce startups to students looking for ways to supplement their income.

Reportedly, a number of online lender vendors, who know that young shoppers are desperate for disposable funds, are demanding that potential clients send them naked selfies as a form of collateral. Reports say that if the loans aren’t repaid on time, the e-lenders threaten to leak the acquired selfies to the individual’s family and friends. Many vendors additionally charge high rates interest on the original loan amount, thereby trapping victims in more debt, and forcing them to send more pictures and videos.

These kinds of transactions are known in China as “naked loan services.”

According to state media outlet China Youth Daily, in 2016, a total of 10 GB of nudes from 161 young women — all of who were clicked with their photo IDs—were leaked online by the micro-lenders. Most of the victims were aged between 19 and 23, and typically borrowed sums of money between $1,000 and $2,000. Others were reportedly given the option to do sex work in order to pay off their loan.

Reuters further reported that the issue of naked loan services in China has increased so much that, last year, the country’s financial regulators vowed to crack down on unlicensed micro-lenders. A multi-ministry task force was quoted in a statement “Amid the rapid development of cash loans—while they have played a role in meeting the normal credit needs of some groups—problems such as over-lending, repeat borrowing, improper collection, abnormally high-interest rates, and privacy violations have become prominent.”

While new regulations and monitoring have been introduced, as well as unlicensed organisations and individuals banned from conducting a lending business, local media reports suggest that the industry is still thriving on social media.

While it should be noted that micro-lenders have begun operating in several emerging as well as developed economies (India has services like SimplPay and LazyPay), only China seems to be suffering from this unfortunate, and highly illegal, term of service.

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