Squid Game goes real: Chinese fraudsters lure victims with debt relief schemes

Similar to the popular South Korean TV series Squid Game, fraudsters in China are eyeing people who are struggling financially amid a slumping economy by promising prize money, debt restructuring, and unusual schemes.

However, Chinese players are taking “self-discipline” challenges to not risk their lives, unlike the series Squid Game, which has returned with a second season on Thursday.

According to courts, some participated in isolation challenges, paying hundreds of dollars to stay in a room for days. After this, participants followed prescribed rules with a promise to win as much as 1 million yuan, which is nearly $140,000. However, this is a scam. The regulators are warning people about such scams that promise debt relief, according to a report by Reuters.

These isolation challenges have gained popularity this year and were advertised on China's TikTok, known as Douyin amid the slowing growth of the world's second largest economy. China's growth slowed down in recent years, forcing policymakers to bring in new measures to boost domestic income.

The challenges have a long list of rules, such as toilet breaks of no more than 15 minutes and the prohibition of touching the alarm clock more than twice a day. In October, a refund of 5,400 yuan or $740 to a player with the surname Sun, was ordered by a court in the eastern province of Shandong. This refund amount was the sign-fees, which was claimed to rule the contract was unfair and “violated public order and good morals."

In order to win 250,000 yuan, Sun was trying to survive a 30-day isolation. The challenge included rules such as prohibition from smoking, use of electronic devices, consumption of alcohol and contact with anyoby outside the room. According to the organisers, Sun covered his pillow on the third day, which broke the rule of players obscuring their faces.

On Tuesday, the National Financial Regulatory Administration (NFRA) warned people not to fall for “debt intermediaries” that promise to help people with debt restructuring or improve their credit profiles.

These intermediaries use phone calls, texts, flyers and ads on social media to promise to secure new loans and temporary funds. The regulator, however, claimed that these services come with a high fee.

They charge up to 12 per cent of loan value as “service fees,” the report said, citing National Business Daily.

The household loans in China were around 82.47 trillion yuan or $11.3 trillion in November, it added.