China likely to rein in ads for internet loans amid debt, privacy concerns
Online loan illustration: VCG
Pop-up ads that appear on many internet loan product mobile apps are "out of control", leading to increasing consumer and professional debt and privacy concerns. Some predict this could be the next sector to face tighter regulation in light of China's growing efforts to curb problematic internet industry practices.
Since the beginning of the year, Chinese internet users have been complaining with increasing intensity of pop-up ads and promotions appearing in internet loan apps on China's Twitter-like Weibo.
Such pop-ups are sure to be the next target for regulators, Zhang Yi, CEO of the iiMedia Research Institute, told the Global Times on Sunday, adding that misleading users - especially young ones - borrow too much online and violate user privacy majorly Problems.
The Chinese authorities have already put in place policies and regulations to combat problematic internet loans, to better regulate the promotion and distribution of internet loans among college students and to improve the supervision of banks' internet loans.
The penetration rate of credit products among Chinese consumers ages 18-29 is 86.6 percent, and 44.5 percent of people in that age group are in debt, according to a research report by Nelson Report.
"Chinese regulators have been wary of credit products that could put too much debt on the young population at too young an age. The main users of apps as popular as food delivery apps are young consumers, and problems can go wrong . " Campus loan fraud, "said Zhang
Zhang noted that loss of personal information is also a serious problem as internet credit companies typically make money reselling consumers' personal information and consumer user experiences are also affected by such distracting and misleading advertisements.
"Every time Didi Chuxing reminds me to get a voucher, I always end up on the loan application page," said a Weibo user. Didi Chuxing is a car hail platform supported by Alibaba.
Internet users also urged Meituan, a leader in food delivery, to bundle coupons with credit products. One user said when trying to use a voucher for her order, she was asked to enter her bank account information and sign a loan product agreement to receive a 6 yuan ($ 0.92) voucher.
"If a student requests the voucher and provides the bank details, is the student automatically bound to the loan product?" said the user.
"The online advertising and distribution of internet loans has gotten out of hand," Dong Dengxin, director of the Financial Securities Institute at Wuhan University of Science and Technology, told the Global Times on Sunday.
Many apps that distribute ads or use popups to promote internet loan products are not even finance apps or loan apps. Therefore, it is necessary to strengthen the regulation of these apps from the standardized perspective of both the advertising industry and the credit industry, added Dong.
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