Fraudsters in China are capitalizing on the popularity of the South Korean TV series “Squid Game” to exploit the financially vulnerable in a struggling economy, offering prize money, debt restructuring, and other deceptive schemes.
What Happened: Unlike the life-threatening challenges in the original series, the Chinese version’s “self-discipline” challenges do not pose a risk to participants’ lives. However, some contestants in isolation challenges, who pay substantial fees to follow strict rules in the hope of winning up to 1 million yuan ($140,000), have been found to be victims of scams, reported Reuters on Wednesday.
These challenges, often promoted on Douyin (the Chinese version of TikTok), have gained popularity amid the country’s economic slowdown. The challenges come with a long list of rules, including strict time limits for toilet breaks and restrictions on the use of electronic devices.
Regulators have intervened in some cases, with a court in Shandong province ordering a challenge organizer to refund a player’s sign-up fees, ruling the contract as unfair and against public order and morals.
The National Financial Regulatory Administration (NFRA) has also warned the public about dubious debt relief claims. These claims are made by “debt intermediaries” who promise to help restructure debts or improve credit profiles for a high fee.
Why It Matters: The rise of such fraudulent schemes coincides with China’s economic slowdown. In 2024, the Chinese economy is expected to experience a more severe downturn, with no clear industry catalyst for recovery, according to analysts. This economic pressure has led to a surge in these deceptive practices, taking advantage of the financially distressed.
China’s economic challenges have also prompted policymakers to consider significant measures, such as allowing the yuan to weaken significantly in 2025 to counter the potential impact of a 60% tariff on Chinese imports by the United States. This potential devaluation, if implemented, could further exacerbate the economic strain on Chinese households, potentially increasing their vulnerability to such fraudulent schemes.
Read Next:
Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
Image via Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
