As we enter 2026, the rise and volatility of international gold prices have captured market attention. Behind the booming investment in precious metals and gold jewelry transactions, some illegal gold-related activities are also surging under the surface. Recent investigations reveal the emergence of a service called "gold installment plans," promoted as requiring zero down payment and offering low interest rates. However, these schemes conceal the risks of illegal lending, essentially conducting loan activities under the guise of consumption. What tactics are employed in these "gold installment" scams? Furthermore, what other similar deceptive schemes should the public be wary of?

The Yueqing City Procuratorate in Zhejiang Province recently utilized a big data legal supervision model and discovered that a local jewelry store had applied for the enforcement of notarized creditor's rights documents in nine cases within a single year, a notably abnormal pattern that drew regulatory attention.

Zhou Chaozhang, Director of the Sixth Procuratorial Department of the Yueqing City Procuratorate, explained that notarized creditor's rights documents essentially allow entities, based on certain credit or sales relationships notarized by a public notary office, to apply directly to the court for enforcement without undergoing litigation. This method is commonly used by financial institutions like banks.

Upon深入 investigating the enforcement case files involving this store, the procuratorate found that what appeared to be simple sales contract disputes were, in reality, scams targeting consumers. One consumer, Mr. Zhang (a pseudonym), was attracted by the store's advertisement claiming "no credit check required, 0% interest, and the ability to immediately liquidate the gold after purchase." He purchased a gold bracelet priced 30% higher than the market rate and signed relevant contracts and repayment agreements. In this manner, Mr. Zhang fell into the trap set by the merchant.

Zhou Chaozhang stated, "We determined this constitutes illegal lending. Based on the statements from the parties involved in this case, our preliminary estimates indicate an annualized interest rate ranging from over 70% to over 100%. The borrowers incurred very high interest charges within a short period."

Prosecutors indicated that this practice, which disguises illegal lending as legitimate transactions, involves a interlinked, five-step process designed to exploit victims. The first step is precise profiling: targeting individuals with poor credit histories who struggle to obtain loans. The second step involves deceptive packaging: using slogans like "zero down payment" and "no credit check required" to attract vulnerable consumers.

Zhou Chaozhang elaborated, "The merchants claim they don't check credit scores and offer zero-down-payment installment plans. Young people short on cash can easily be tempted. Because gold is a hard asset, they think they can purchase it with no money down and immediately sell it for cash. The merchants exploit this psychology, ensnaring individuals who are financially strained and have credit issues."

The third step is the contract trap: Merchants take advantage of consumers' lack of legal knowledge or their desire for small gains, using installment sales contracts to circumvent financial regulations. The fourth and crucial step is "deflated liquidation" – inflating the price and then offering consumers a liquidation price below the international gold rate, thereby completing the scheme and securing illegal profits.

Zhou Chaozhang provided an example: "Suppose the merchant prices a gold item at 10,000 yuan. After the installment plan, the consumer might end up paying around 11,000 to 12,000 yuan. When the consumer goes to liquidate the gold, the buyback price is set at roughly 10 yuan below the international gold price per gram. The resulting calculated annualized interest rate becomes extremely high, far exceeding the legal limit."

Yue Shanshan, Deputy Director of Beijing Yuecheng Law Firm, noted that the key tactic merchants use to disguise this "routine lending" scam as consumer installments is hiding the true annualized interest rate of the gold installment plan.

Yue Shanshan explained, "The merchants conceal the real interest rate; the information is opaque. The price difference is actually very large, and the loan term is very short. This interest rate far exceeds the upper limit permitted by national regulations for annualized rates. They are essentially lending money through this method."

The final step of the scam is "judicial legitimization," where the merchant uses the previously signed notarized creditor's rights documents to legitimize the inflated debt.

Zhou Chaozhang warned, "The state cracks down severely on illegal lending. The most concealed part of the entire process is using notarized creditor's rights documents, arbitration awards, or civil judgments to legitimize the inflated debt, subsequently applying to the court for enforcement."

These disguised lending operations are not limited to physical stores; online channels promoting "zero-down-payment gold installments" have also victimized numerous consumers. A review of public reports shows that numerous media outlets have previously exposed the tactics of installment malls that conduct lending activities under the guise of sales. Besides gold, the products sold include high-liquidity items like mobile phones, cameras, and e-commerce platform gift cards. However, some of these installment malls lack the qualifications to engage in financial business.

Yue Shanshan clarified that these installment malls essentially exploit some consumers' urgent need for cash and their unfamiliarity with interest rate calculations and regulations. They achieve high-interest lending and illegal profits through contract signing.

Yue Shanshan stated, "These platforms do not possess lending qualifications; it falls under private lending. High-interest lending violates national laws and constitutes illegal business activities that disrupt market order. In serious cases, it can lead to charges of illegal business operations."

The true annualized interest rates on products from these installment malls far exceed the upper limit stipulated by Chinese law. So how is this real annualized rate concealed?

Yue Shanshan revealed, "The platforms拆分 the high interest into components like membership fees, technical service fees, or handling charges. They separate the fee items, but when combined, the true annualized interest rate significantly surpasses four times the Loan Prime Rate (LPR) – the upper limit for private lending – constituting usurious lending."

On March 15, the National Financial Regulatory Administration and the People's Bank of China jointly issued the "Regulations on Disclosure of Comprehensive Financing Costs for Personal Loan Business," requiring lending institutions to provide borrowers with a clear statement of comprehensive financing costs during business processing. This statement must itemize all fee projects, including loan interest, installment fees, and credit enhancement service fees. Yue Shanshan emphasized that combating these installment "routine lending" scams requires joint efforts and coordinated action from regulatory authorities.

For consumers, Zhou Chaozhang from the Yueqing Procuratorate advises that when considering installment purchases, it is crucial to verify the institution's qualifications, opt for正规 licensed financial institutions, calculate the comprehensive annualized interest rate, carefully review the nature of the contract, and remain vigilant against traps like inflated prices or short repayment cycles.