Hundreds of Chinese villagers end up on social credit blacklist after being ‘tricked’ into applying for US$15m worth of loans

Nearly 200 villagers in eastern China have been put on a social credit blacklist after claiming they were tricked into applying for almost 100 million yuan (US$15 million) worth of loans. At the end of last year, residents of Zhangyinzhuang, a village in Guan county, Shandong province, received letters from the central bank saying that they had lost all their social credit because of overdue loan payments, Beijing News reported on Wednesday. But they insisted they thought they were signing documents authorising them to act as guarantors for friends and relatives who were seeking credit, and did not realise their signatures would be used to apply for loans. An employee of the bank at the centre of the case has since left his post and police said they were investigating the matter. Meanwhile those affected are now trying to get their names removed from the social credit blacklist. Chinese police detain 42 suspects over fake prostitutes scam on WeChat Those affected had all agreed to act as guarantors for loans that friends and relations had taken out with Liaocheng Runchang Agricultural Commercial Bank. But a source familiar with the police investigation told Beijing News: “The guarantors had not only signed the guarantor agreement, but also signed a personal loan contract [which looked very similar].” One villager, Li Wei, told the newspaper that many of those affected had little or no education and were not fully aware of the legal consequences of signing such documents. Other villagers said they suspected they had been tricked into signing loan agreements and some admitted they did not understand the contents of the documents they had signed. “The guarantors may have been tricked into signing the loan agreement in the role of the main borrower,” villager Li Zhe said. Last year, some villagers received court summonses related to overdue bank debt. Some did not respond because they did not believe they had applied for a loan, but those who tried to fight the case in court lost their cases and have been banned from buying property or vehicles. China’s richest regions are also home to the most blacklisted firms A local villager, Li Liang, said Zhangyinzhuang has around 400 households, meaning the social credit blacklist could potentially include half the village. Many villagers are banding together to seek compensation from the bank and have contacted police, who are now investigating the matter. On January 22, the Liaocheng Banking Supervision Bureau announced that Liaocheng Runchang Agricultural Commercial Bank had been fined 200,000 yuan (US$29,907) for “falsely transferring non-performing loans and serious violation of credit assets’ transfer guidelines and prudent operation regulations”. The bank said one of its managers had “already left his position and will await the next steps of the investigation”. The manager in question repeatedly hung up when Beijing News reporters attempted to speak to him about the case. Baidu asked to answer complaints of ‘verified’ travel scams The bank also said that it had asked the local social credit bureau to reverse the status of blacklisted villagers. Some of the villagers have had their loans cleared by the bank and their credit scores are now under review. China’s rapidly developing social credit system is designed to ban individuals and businesses deemed untrustworthy from numerous activities and services. Those on the blacklist can be banned from travelling on trains or planes, buying property and accessing financial services. Last year, more than 3.59 million registered businesses were added to the blacklist. Credit scores can be affected by a range of activities – from failing to repay loans, false advertising or being embroiled in a consumer scandal, to petty offences such as sitting in the wrong train seat, bad driving and “uncivilised behaviour”. In some cases, wrongdoers’ personal information has been splashed across public billboards. But human rights advocates argue that the system which is being rolled out nationwide violates privacy rights and could ensnare innocent people since it does not take individual circumstances into account.