Regulatory Ambiguity Cannot Be a "Get Out of Jail Free Card" for Installment Malls | Yellow River Commentary

In October 2025, new regulations on installment lending were implemented to cut off the gray channels of high-interest lending and establish a strict rule of an annualized comprehensive financing cost of 24%. Regulatory authorities explicitly require that interest, credit enhancement service fees, guarantee fees, and all other costs be included in the comprehensive financing cost calculation, prohibiting split charges that covertly raise interest rates. As a result, traditional lending institutions’ profit margins have been significantly squeezed.

Under the crackdown, some installment shopping platforms have started to “transform,” packaging loans as consumption. They use high product markups and third-party cash-out schemes to appear compliant with regulations on the surface, while secretly charging high interest rates, heavily targeting credit-weak populations in lower-tier markets.

How long can these platforms and cash-out agents continue their “collusion”? “Cash out without receiving goods” exposes the absurdity of their logic: there has never been genuine consumption demand, only borrowing impulses. These seemingly compliant platforms are actually high-interest lenders, creating cash-out chains that blatantly challenge financial regulation and trap countless consumers in debt.

How long can the “gray-area tricks” of installment shopping platforms last? They publicly claim “annual interest rates not exceeding 24%” to appear compliant, but secretly sell iPhones at “sky-high prices.” This “nominal compliance but actual violation” approach not only exploits regulatory loopholes but also blatantly tramples on rules. The ambiguity over whether product markups should be included in the comprehensive financing cost has become a “get-out-of-jail-free card” for these platforms, allowing them to profit wildly in the gray zone.

From lending institutions to installment shopping platforms, these platforms are merely wearing different “masks”; their high-interest lending nature has never changed. When new regulations prohibit disguising interest through service fees and guarantee fees, these platforms simply hide the interest and fees within product markups, playing a game of “building the bridge while crossing the river.”

In response to the chaos of high-interest rates in installment shopping, regulatory authorities are also advancing industry governance. According to Caizhongshe, by early 2026, local financial regulatory bureaus will conduct guidance sessions, emphasizing that any business with an annualized interest rate exceeding 36% will be classified as “usury” and prosecuted accordingly. Additionally, Southern Metropolis Daily reports that recent investigations have involved multiple installment shopping platforms, focusing on data security, product pricing, and member rights.

The reason these platforms dare to act so recklessly is their precise targeting of the capital needs of lower-tier markets. By offering “qualification loosening” as bait, they treat credit-poor and hard-to-loan populations as prey. “Almost everyone has a limit,” an industry insider rule, reveals their profit-driven nature.

Platforms knowingly understand that lower-tier users have weak risk resistance but turn a blind eye to their qualifications, using high-cycle consumption limits to trap those in urgent need of cash, then harvesting profits through high markups and hidden fees. You think you’re getting “life-saving” cash, but in reality, it’s a high-interest loan that only worsens your situation. You believe you’re making a normal installment purchase, but you’re actually caught in a cash-out trap colluding with cash-out agents. This targeted exploitation of vulnerable groups shows no business bottom line and severely damages financial fairness.

Worse still, these installment shopping platforms layer their tricks, pushing the boundaries of “harvesting” to the extreme and trampling on consumer rights. To obtain personal information, they require real-name authentication before browsing products; to make users sign loan contracts unknowingly, the signing prompts flash by; to maximize profits, they hide the membership cancellation options and bundle high-priced service packages worth thousands of yuan.

Precise data leaks have broken through the last line of defense for potential victims. When users register on the platform, SMS messages from cash-out agents arrive immediately; once the credit limit is cleared, the temptation to increase it follows. The tacit cooperation between these platforms for traffic diversion and cash-out realization makes it hard to believe they are “illegally misusing third parties.” When various platforms claim “never cooperating with cash-out agents,” they should explain why users’ personal information flows so precisely into the hands of cash-out agents. Is this a technical loophole or a transfer of interests?

The chaos of installment shopping stems from the blurred identity of these platforms, creating a vacuum of responsibility. They claim to be “technology providers” or “operators,” self-identifying as e-commerce platforms, not small loan companies, and thus are not directly regulated by local financial authorities nor fully responsible for consumer rights protection. This ambiguous status allows them to operate in regulatory gaps, shifting risks onto users while keeping profits for themselves.

The problems with installment shopping are not just simple commercial disputes but serious issues concerning financial market stability and consumer rights. Their actions openly flout financial regulation and deliberately undermine market rules. The cash-out chains of installment shopping platforms are blatant oversteps of regulatory boundaries and represent a “cancer” in the financial market.

For ordinary users, vigilance is essential against targeted exploitation disguised as installment shopping. When someone enthusiastically tells you “shopping can also turn into cash,” they are not helping you but selling you a chain. Truly compliant financial platforms won’t trap you in high-interest repayment hell or turn you into a “credit refugee”; only usurious lenders do that.

Commentator: Liu Jinyang Editing: Lu Ting Proofreading: Tang Qi