Chinese loan lenders have found an innovative and intimidating method of ensuring that female borrowers return the money with interest. Young college students in China are reportedly falling prey to loan sharks who take nude photographs as collateral from the young women.
College students in need of money agree to send their nude photographs. In return, they receive higher loan amounts at usurious interest rates from lenders on the internet. The women are threatened with public exposure of those photos if they fail to pay up, the Guardian reported.
One borrower was quoted by the Associated Press as saying that she had taken a loan of 500 yuan ($76) at 30 percent interest per week. To pay her old loan she had to take on new loans, making the principle amount at 55,000 yuan ($8,347). She was then asked for a nude photograph as guarantee of repayment.
The transactions reportedly take place on a website called Jiedaibao run by JD Capital. The company, however, has condemned the practice. They also told the Guardian that they would comply with the police on investigation into such cases.
"This kind of naked loan is actually taking advantage of the online platform to operate an illegal usurious offline business," they said.
State-run Beijing Youth Daily quoted an unidentified representative of JD Capital as saying that they have no say in the collateral that lenders decide to take, according to the Guardian. "Nude photos are not property. It is in the category of reputation rights," Zuo Shenggao from Jingshi Law Firm weighed in on the matter.
"If anyone threatens to publish the photos online, they will violate the clients' reputation. At the same time, they are also spreading pornographic material. Both are illegal and they will commit double offence," state-run china.org.cn reported, according to the Press Trust of India.