Protecting Consumers: Banks Crack Down on Fake Loan Intermediaries

Loan promotion calls, constantly changing numbers and making relentless "serial calls," are extremely bothersome and seem impossible to resist. Recently, several banks have issued statements, clearly stating that they have not cooperated with any loan intermediaries and warning consumers to be vigilant against the risks posed by illegal loan intermediaries.

A risk control officer from a certain bank frankly stated: "It's difficult for banks to acquire customers, and it's also challenging to approve customer credit limits. Loan intermediaries exploit both ends of the transaction. If it's a formal cooperation between institutions, financial organizations will strictly require intermediaries not to charge additional fees; if it's a private-to-private arrangement, that's an individual behavior of the account manager."

Analysts point out that for borrowers, loan intermediaries increase the cost of personal loans and may even be deceived by illegal intermediaries, leading to financial losses and inability to obtain loans after payment; for banks, loan intermediaries "package" loan materials to help unqualified borrowers pass loan approvals, posing a risk of asset loss.

Why do the rampant loan promotion calls persist despite bans? How can the rights and interests of financial consumers be protected?

The "never-ending" loan telesales calls

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"Hello, would you like to apply for a loan?" The promotional calls from unknown numbers, accompanied by text messages, make loan intermediaries seem "omnipresent."

"Dear valued customer, you are eligible to handle a loan of 677,000 yuan with a five-year term at our bank. If you need it, please reply with 1 to proceed, reply with 2 to check the interest rate, and reply with R to opt-out."

The journalist, posing as a borrower, contacted a loan intermediary named Chen Ming (a pseudonym), who provided two loan options: one is a three-year interest-first principal-later plan, requiring applications to three banks; the other is an equal principal and interest plan, available for a five-year term. After designing the plan, Chen Ming told the journalist: "You can fill out the form and give it to me, or I can accompany you to the designated bank window to handle it."

When discussing product fees and the legitimacy of the company, Chen Ming said: "Many of our employees come from banks and have a deep understanding of bank products, and we cooperate with banks. The fee is 1.5 percentage points, collected after the bank disburses the funds; you can trust us on this."

A credit manager from a state-owned bank told the journalist: "Some account managers may collaborate with intermediaries, but this practice carries significant risks. When loan intermediaries get involved, the authenticity of the materials decreases, and there is a risk of fraud. As the primary responsible party, account managers bear a great deal of risk.""The service charges of intermediaries are tiered, merely helping you introduce more suitable products, such as charging 10,000 yuan; a one-stop service, taking you to the business department to handle loans, such as charging 20,000 yuan; if your qualifications do not meet the requirements, the intermediary helps with false packaging, which may cost 80,000 yuan." The above-mentioned interviewed risk control personnel from a certain bank pointed out that there are indeed bank employees who are in contact with intermediaries. If the intermediary only helps introduce products, it would be one thing, but the intermediary also helps package clients. Some clients with particularly poor qualifications, once the bank disburses funds, are prone to creating non-performing loans.

An industry insider who wishes to remain anonymous told the reporter that loan intermediaries often obtain the contact information of those willing to borrow through various means to promote their services. Those who have recently inquired about loans offline or online from financial institutions, those who have searched for loan information online, and those who have long ago consulted financial institutions or loan intermediaries about loans may all receive promotional calls from loan intermediaries.

This unnamed industry insider further pointed out: "The ways in which loan intermediaries obtain personal contact information are quite complex. Most financial institutions follow the requirements for compliance in loan business and the protection of customer privacy information. However, it cannot be ruled out that a few financial institutions or individuals within these institutions may collaborate with loan intermediaries for performance or personal gain. In addition, loan intermediaries may also illegally obtain personal contact information from advertising channels, other intermediaries (such as housing intermediaries, car sales channels, etc.). Strictly speaking, without the individual's written authorization to provide their contact information to third parties, such actions by loan intermediaries and related parties are illegal."

In the view of An Guangyong, an expert from the Credit Management Committee of the All-China Federation of Mergers and Acquisitions, some telemarketing companies promote under the guise of banks, even impersonating bank staff to sell loan products, using consumers' trust in banks to commit fraud. Moreover, some banks may outsource their marketing activities to third-party telemarketing companies. Although the banks themselves do not directly participate in illegal operations, the lack of outsourcing management may also contribute to the proliferation of telemarketing. Therefore, banks are not entirely blameless in the proliferation of telemarketing, especially in terms of outsourcing management and brand maintenance.

Shen Jiaqing, Deputy Director of the Shanghai Jingyi Industrial Digital Intelligence Research Institute, pointed out that for the extremely fragmented personal and small and medium-sized enterprise loan business, it is objectively difficult for banks to meet the needs of business development with their limited credit manager teams. From the perspective of their own interests, many banks maintain a certain degree of acquiescence to the behavior of telemarketing companies developing clients in their own name. Especially some joint-stock commercial banks, city commercial banks with greater business pressures, and first-line credit managers bearing larger business targets, do not actually exclude cooperation with loan intermediaries to expand customer sources in actual operations, and some banks will even actively provide conveniences in information, procedures, and review aspects.

Multiple measures to rectify illegal loan intermediaries

Industry insiders pointed out that illegal loan intermediaries will have a certain negative impact on banks, customers, and the financial market.

"For banks, illegal loan intermediaries may help borrowers who do not meet the conditions obtain loans or increase credit limits through fabricating false information, which significantly increases the bank's risk. False loan advertising will also severely affect the bank's reputation and image. For customers, illegal loan intermediaries usually promise 'fast loan disbursement,' 'low interest rates,' 'no collateral,' and other preferential conditions, but in actual operations, they charge high intermediary fees, increasing loan costs. There may even be cases of forging loan approval results to defraud related fees, and customers' personal information is also at risk of leakage and misuse. For the financial market, illegal loan intermediaries will distort the order of the bank credit market, increase the difficulty of loans for normal customers, reduce the trust of economic entities in the financial system, and some loans face higher credit risks or are used in violation of regulations, bringing related financial risks." Shao Ke, head of the banking and integrated operations team at the Bank of China (601988.SH) Research Institute, pointed out in an interview with our reporter. The aforementioned unnamed industry insider also mentioned that first, loan intermediaries often take advantage of information asymmetry, packaging loan products that can be obtained from banks as special channel products, and charging high information service fees or intermediary fees (a one-time charge of not less than 1%), making the actual loan cost extremely high. Second, if loan intermediaries collude with some individuals in financial institutions to approve loans for unqualified borrowers, it will bring the risk of asset loss to financial institutions. Third, borrowers may be deceived by illegal intermediaries, leading to financial property loss, and after paying, they may not be able to obtain loans at all. Finally, it may also bring legal risks to borrowers. Common situations are intermediaries claiming they can help customers with poor credit records modify their credit or increase their credit, instigating borrowers to forge documents and commit crimes.

It is worth noting that loan intermediaries will also spawn a series of gray industry chains. Shen Jiaqing told the reporter that with the frequent chaos in the telemarketing industry and the continuous iteration of technology, such as "outbound call systems + telemarketing robots" claiming to evade the supervision of communication operators through technology; "anti-blocking robots" are widely promoted with the slogan "ordinary cards become whitelisted in seconds, high frequency does not block numbers"; for customers who do not have a company but want to handle business loans, there is also a one-stop service of "purchasing shell companies + changing legal representatives."

So, why are loan intermediaries repeatedly banned but not stopped?The aforementioned industry insider, who preferred to remain anonymous, analyzed that there are two main reasons: on one hand, some financial institutions are under great performance pressure but lack effective marketing and customer acquisition capabilities, leading them to choose cooperation with intermediaries to improve their performance; on the other hand, consumers lack necessary financial consumption knowledge, resulting in information asymmetry, making them easily misled and deceived, thus providing opportunities for illegal loan intermediaries. It is suggested that the issue should be addressed by reasonably setting financial institution evaluation indicators (reasonably setting performance targets, strengthening compliance requirements), intensifying routine inspection work, multi-department coordination, personal information protection, and financial regulatory authorities and financial institutions strengthening financial consumption knowledge propaganda and education for consumers from multiple aspects.

In response to the chaos of loan intermediaries, several banks including China Construction Bank (601939.SH), Bank of China, Agricultural Bank of China (601288.SH), and Shanghai Pudong Development Bank (600000.SH) have issued public statements, clearly stating that they have not cooperated with any loan intermediaries and warning consumers to be alert to the risks of illegal loan intermediaries; the Jiangsu Regulatory Bureau of the China Banking and Insurance Regulatory Commission issued the "Notice on Carrying Out Special Action to Combat and Rectify Illegal Loan Intermediaries," severely cracking down on the illegal marketing activities of illegal loan intermediaries.

For financial consumers, Shao Ke suggests taking the following measures to prevent risks: First, apply for loan business through regular channels and carefully verify the qualifications and business registration information of loan intermediaries when using their services, choosing cautiously; Second, fully understand the relevant information of the loan contract, including loan conditions, comprehensive fees, repayment requirements, and related service terms, to avoid being misled by false propaganda; Third, be highly vigilant against unnecessary transfer requirements to prevent funds from being defrauded and pay attention to protecting personal privacy information.