A loan brokerage platform in China collapsed in June amid allegations that it diverted repayment funds from tens of thousands of users, leaving borrowers facing unexpected demands from banks.
The scheme had been promoted as a simple way to earn small commissions. Users were encouraged to register on a loan broker’s platform, take out loans from partner banks, and repay them immediately in full. In return, they would receive a modest payment.
Yang Meilan said she was introduced to the system by a friend.
She explained that each completed loan brought in a small commission.
"Each order will pay a few dozen yuan to me as commission. Doing a few orders a month allowed me to earn two to three hundred yuan ($30-$45). We always thought we were just helping to promote a new platform," she said.
She added that many participants were ordinary office workers or stay-at-home mothers.
However, Yang later discovered that the platform had not been transferring all repayment funds back to the banks.
The broker is affiliated with Juzi Digital Technology, founded in 2014. The company operates apps such as "Juxiaohua" and "Yikoudai," which were used to facilitate loan applications.
Juzi Digital Technology has partnerships with 70 financial institutions and more than 100 internet platforms, with cumulative transactions nearing $19 billion (130 billion yuan) and over 260 million registered users.
Concerns emerged in late June when borrowers began receiving overdue notices from banks, despite having repaid their loans on time through the platform.
On June 29, hundreds of users gathered at a petition office in Yingkou City, Liaoning Province, where the company is based, to seek redress. Police later dispersed the crowd.
Yang was among those present.
"Probably around four to five hundred there. We registered our claims. The authorities there said that since we had already repaid the platform, it became the platform's obligation to transfer the money to the bank, and it had nothing to do with us as individuals," she said.
By the end of June, Juzi Digital Technology’s apps, including Juxiaohua and Yikoudai, had shut down, and customer service staff could no longer be reached.
At the same time, thousands of complaints appeared on Chinese consumer platforms, with users questioning the whereabouts of their funds and reporting damage to their credit scores.
Local police in Yingkou confirmed they had opened an investigation into the case.
Yang estimated that the number of people affected could be significant. "Based on my own exposure, the scale was quite large, likely involving at least 100,000 people," she said.
Another user, Lin Huijuan, who gave a pseudonym, described a similar experience.
"We took out loans through the platform and repaid the platform within the agreed timeframe. We still have the complete repayment records. However, the platform failed to return the money to the third-party banks, so now those banks are coming after us for the money," she said.
She said the small size of individual loans and their quick repayment had initially masked any issues.
"I borrowed about 45 times. Each cycle lasted a month, but I usually paid it off within a few days."
Because she had not previously received any reminders from banks, she assumed everything was in order.
"The banks didn't press us before, so we had absolutely no idea there was a problem."
It was only in late June, after receiving a repayment reminder message, that she realised the scale of the situation.
As more users began sharing similar experiences online, she said it became clear how widespread the issue had become.