IT House News on January 13 In order to increase mobile phone sales, major operators often provide many preferential policies to customers who intend to purchase mobile phones, such as installment purchases. However, a reporter from Xinhua News Agency discovered that some telecom salespeople privately handled installment loan business for customers without the knowledge of consumers. 
Xinhua News Agency cited three cases of telecom’s so-called preferential phone purchases:
1. A user once received a debt collection text message and was told that the existing mobile phone number was four days overdue. Wings paid the 50.08 arrears of the contract phone. Yuan, and the other party also stated that if the arrears are not paid within the time limit, the relevant records will be uploaded to the credit reporting system of the People's Bank of China. After the user inquired, he discovered that he had been "handled" for a business called "Orange Installment" when handling the "broken screen insurance refund" business at the telecommunications counter in January last year.
2. The user Ms. Zhang went to the telecommunications business hall to buy a mobile phone. The salesperson said that as long as she applied for a telecommunications package with a monthly phone bill of 99 yuan (including three unlimited traffic cards) and bought a mobile phone, she could get a direct discount of 800 yuan. The user's application was completed. However, in the following days, as long as the user forgets to pay the phone bill, he will experience an "explosion of reminders". The content of the reminder calls and text messages are the same as in Case 1. Failure to pay the fees after the due date will affect the credit report. Later, users went to the business hall and asked to cancel their accounts, but were told that they had to pay the discounted purchase price of 800 yuan at the time and more than 1,000 yuan in liquidated damages.
3. User Ms. Chen said that in addition to "giving away mobile phones", when handling telecommunications services, the salesperson also handled installment loans for users in the name of giving away TVs, electric bicycles, etc. without the user's knowledge.
It is worth noting that there are many cases where China Telecom has applied for installment loans for users without their knowledge, resulting in overdue loans.
During the later interviews and investigations, the reporter found that telecom salespersons will be rewarded for each "head" they acquire. If consumers question the safety of the "installment" business, telecom salespeople will "throw out" various temptations. As for this kind of business that packages "loans" with "discounts", staff from both Yi Pay and Orange Installment acknowledge that this is a type of consumer loan. Orange Installment customer service stated that this business is mainly because Telecom uses its huge user base. When users apply for Orange Installment business and wink at the camera, they are actually authorizing Telecom to handle an Orange Financial Loan in the name of the user. The user's phone bill payment is actually the repayment of the principal, and the interest generated by the loan is what Telecom calls "red envelope cashback". As long as the user's mobile phone is in arrears, the issuance of red envelopes will be suspended.
Some people in the industry believe that this is in line with the business characteristics of online loans. Even if Telecom automatically debits payments on schedule, if a consumer's account is short of funds, regardless of the amount, it will easily affect his or her credit report. The default penalty for Orange Installment includes liquidated damages and late payment fees, with the interest rate for liquidated damages reaching four times the bank’s benchmark loan interest rate.
What should consumers do
Chen Yinjiang, deputy secretary-general of the Consumer Law Research Association of the China Law Society, said that telecom operators and orange installment operators should inform consumers in advance of safety precautions, rights restrictions, etc., and then allow consumers to independently Decide whether to buy. At the same time, relevant departments should further increase supervision, and consumers should continue to improve their awareness of self-protection to avoid being deceived.
