Online Chinese loan sharks are demanding naked pictures from female university students as IOUs for so-called 'nude loans'.
Using online social media platforms such as qq.com, the loan companies claimed the pictures would be used as guarantees to ensure the debtors pay on time.
According to reports in People's Daily on June 13, borrowers must send their nude photos and student IDs to loan sharks who warned they would release the information to the public if they fail to make payments.
The so-called 'nude loans' phenomenon is reportedly targeted at female university students who are desperate to get their hands on extra cash.
The practice is observed in different cities in China and is mainly carried out via social media.
People's Daily spoke with one student known locally as Li Li who uploaded the nude photos to borrow 500 yuan (about £55) from an online loan company with a weekly interest of 30 per cent.
Tragically unable to meet the conditions, she helplessly borrowed the same amount again the following week.
When Li Li didn't have the money to give the loan sharks, they threatened to send the images to her family or even publish them online.
Her debt has now spiraled dangerously out of control to a whopping 55,000 yuan (almost £6000).
Li Li said: 'The scariest thing about this loan company is its loan agreement. Many of my fellow female students have got wrapped up in this too.'
She added: 'Lots of people get in touch whenever moneylenders shout, "Who wants a female student nude loan?" to groups who want to borrow cash on qq.com.'
Debtors are also required to provide their family contact details by the loan sharks.
If they fail to make their monthly payment, the loan companies can disclose the fact they are borrowing money to their families.
Moneylenders shockingly also charge an extra 10 per cent 'handling fee' for dealing with the naked images.
Legal experts warn that these private companies will blackmail borrowers who cannot return the money pressuring them by threatening to publish their scantily-clad pictures on the web.
According to Chinese state law article 364, the dissemination of pornographic materials, which includes books, magazines and images could end you up in jail for up to two years.
Chinese web users have criticised the students saying they were stupid to get involved with such obvious scams. However, others are more sympathetic, claiming desperate times make people do stupid things.
The police, financial and internet regulators intend to improve online vigilance, and attack these companies and their excessively high interest loans, according to People's Daily Online.