Can the next app pay off the credit card? This may be illegal

2024-05-21 09:38 Supreme People's Procuratorate Editor in charge: Chen Wei

Summary: ... Mr. Wang and others organized technicians to tackle key problems, developed an app specifically for credit card users to cash out and repay on behalf, and promoted the app through several downstream companies. During the interrogation, investigators found that although Zhao was the head of the company, he knew nothing about the technical problems of developing apps, and Xu operated all of them independently.

Someone is in the group

Send an app download link

Said you can bind your own credit card through the app

Then cash out the money in the credit card

And directly transfer to your savings card

……

Wang et al. organized technicians to tackle key problems, developed an app for credit card users to cash out and repay on behalf, and promoted the app through several downstream companies. In more than two years, the app developed by Wang and others has attracted 3.01 million registered members, with a total of 154 million transactions and a total amount of 71.5 billion yuan for cash out and repayment on behalf. In December 2023, the Procuratorate of Huai'an District, Huai'an City, Jiangsu Province filed a public prosecution against 16 people, including Wang, on suspicion of illegal business operations. A few days ago, the court held a court session to hear the case in accordance with the law, and will choose a time to pronounce judgment.

User reporting

One day in September 2021, Xiaohui (not her real name), who lives in Huai'an, Jiangsu Province, was pulled into a shopping group by her friends. Soon after, someone posted an app download link in the group, saying that you can bind your credit card through the app, cash out the money in the credit card, and directly transfer it to your savings card.

After Xiaohui downloaded the app, she bound one of her credit cards to one of her savings cards, and then applied to cash out 100 yuan. The money was immediately punched into her savings card. Seeing that the app is so easy to use, Xiaohui logged in to the app twice and cashed out 2000 yuan. Later, a friend reminded Xiaohui that this might be illegal, so she went to the public security organ to report the case.

According to Xiao Hui's introduction, the police found that the main function of the app is to cash out the credit card and postpone the repayment of the due arrears. After registering with the user's real name, the user can share the registration QR code with others. After successful registration, the other party will automatically become the offline member of the sharer, and the online sharer will receive a certain proportion of rewards.

According to the information obtained, the public security organ believes that the app is suspected of committing a crime by helping users cash out their credit cards without real transactions. In September 2021, the public security organ put the case on file for investigation for the crime of illegal business operation. After preliminary investigation, it was found that this app was operated by an information technology company in Hefei, Anhui, and the person in charge of the company was Zhao. In October of the same year, the police arrested Mr. Zhao, 3 sales supervisors and 5 technical directors including Mr. Xu. After interrogation, the persons present truthfully explained their criminal facts.

"Powerful" App

A few years ago, Zhao met Xu when he was working in Shanghai. One day in June 2019, Xu told Zhao that his company had developed a new app that could be cashed out with credit cards. After hearing Xu's introduction, Zhao spent 50000 yuan to buy this app called "True Love Card" from Xu. In July 2020, Mr. Xu contacted Mr. Zhao and said that he had just joined a new company. In addition to the traditional cash out, an app developed by the company now also added a "repayment on behalf" function, that is, it can use some of the remaining credit lines in the credit card to realize the extension of the amount to be repaid in the current period through technical operations.

Zhao became excited again and agreed with Xu that Zhao would be responsible for marketing and pay all the funds needed for the company's operation; Xu, a technology shareholder, is responsible for the development and maintenance of the app, and the profit is shared equally between the two people. In December 2020, Zhao registered an information technology company in Hefei, Anhui Province, rented office space and purchased office equipment such as computers.

Shortly thereafter, under the leadership of Xu, an app dedicated to cash out of credit cards was officially launched. Zhao immediately recruited a group of employees through the Internet to be responsible for the external promotion of the app. Zhao explained that the company has two sources of profit, one is about 0.6% of the handling fee charged by customers when cashing out, plus a fixed "number of transactions" fee of 1.5 yuan per transaction; The other is to repackage the app into a new one and sell it at a price of 60000 to 120000 yuan.

During the interrogation, investigators found that although Zhao was the head of the company, he knew nothing about the technical problems of developing apps, and Xu operated all of them independently. Who developed these apps? What is the technical principle? With doubt, investigators questioned Xu and found that this app and other apps sold after "shell changing" were produced, operated and maintained by a network technology company in Shanghai. In October 2021, the police went to Shanghai and Guangzhou to carry out work and arrested the head of the company, Mr. Wang, and several technicians. So far, an upstream and downstream criminal gang has emerged.

Case solved

In October 2018, Mr. Wang joined a company selling credit card cash out apps and soon became its marketing director. Hou Wang introduced his fellow villager Xu to his company and made him a member of the team. At the beginning of 2019, Mr. Wang had the idea of leaving the company to work alone, and invited Mr. Luo, the technical director of the company, to join. Mr. Luo immediately agreed. In April 2019, Mr. Wang, Mr. Luo and others set up a network technology company in Shanghai, and Mr. Xu joined together as the head of the sales team.

In order to avoid risks, Mr. Wang transferred a shell company from others, and then purposely linked the two teams of the Marketing Department and the Technology Department to two different companies to undertake business in different names. Mr. Wang served as the general manager of the two companies. In order to quickly open the market, Wang's new company launched and promoted this app through various platforms. For a while, Wang's business was very hot.

So, how does this app realize the cash out and repayment of credit cards? According to Luo, after the user initiated the cash out application in the App, The app will invent a consumption scenario and submit it to the bank. The bank mistakenly believes that it is real consumption, and then allocates the "consumption" amount to "merchants", which are actually companies bundled with the app. After receiving the money from the bank, the company will deduct a certain rate and then call the customer to realize the credit card cashout operation. The repayment function is that after receiving the user's instructions, the App will divide the amount owed by the user's credit card in the current month into several small repayment plans, and then the intelligent repayment software in the App will automatically brush out the remaining amount in the credit card, and return the user's credit card after deducting the corresponding service charges, thus completing a small repayment.

In order to continuously expand the scale of users, Wang et al. also designed a hierarchical distribution system. Once users download and use the app to cash out and repay credit cards, the sharers will receive a certain percentage of the commission. By the time of the crime, the company operated by Wang had sold more than 300 credit card cash out apps, with the total amount of cash out and repayment up to 71.5 billion yuan and illegal profits of more than 47 million yuan.

In June 2023, the case was transferred to Huai'an District Procuratorate for examination and prosecution. After examination, the prosecutor found that Mr. Wang and others illegally engaged in fund payment and settlement business without the approval of the relevant state departments, disturbing the market order, and the circumstances were particularly serious. Their acts were suspected of illegal business operations. In December 2023, Huai'an District Procuratorate indicted 16 people, including Wang, on suspicion of illegal business operations. The court has held a court session to hear the case in accordance with the law a few days ago, and will choose a time to pronounce judgment.

key word: App, Cash out, credit card user, Mr. Wang, consumption

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