[Direct answer]You can claim repayment based on the actual amount received, but this requires first securing evidence of fictitiously inflated debts and fabricated bank transaction records. Predatory lending schemes typically lure people in with low-interest rates, no collateral, and instant loan approvals. Victims are then made to sign blank promissory notes, duplicate promissory notes, or ambiguous contracts. The lenders first deduct fees under the guise of "deposits," "service fees," or "front-end interest," then fabricate bank transaction records that mismatch the contract amount. They later intentionally create defaults, transfer debts to other parties to inflate the debt, and finally sue or apply for forced execution based on seemingly legitimate transaction records and notarized creditor's claims. From a legal perspective, the borrowed principal is determined based on the actual amount received, and the pre-deducted interest and fictitiously inflated amounts are not protected. Those who commit fraud, file false lawsuits, or engage in extortion under the guise of lending may also face criminal charges such as fraud, false litigation, or blackmail. Victims should pursue both civil and criminal remedies: 1. Gather all transaction records to restore the true payment history and defend against claims of false intent in litigation; 2. Report the case to public security authorities and apply for the transfer or suspension of related civil cases; 3. Apply for the non-enforcement of notarized creditor's claims. It is crucial not to continue repaying based on the fictitiously inflated amounts or engage in "debt-for-debt" cycles, nor to fail to appear in court after being sued.

I. Problem background and typical scenarios

People in urgent need of cash are most easily attracted by ads that promise "low interest, no collateral, and same-day loan approval". However, when signing the contract, they are often asked to leave blank promissory notes, write down double the amount, or sign a secret contract. Before the loan is disbursed, the lender may deduct security deposits, service fees, or initial interest, leaving the actual amount far below what's stated in the contract. Subsequently, the lender will create default scenarios: intentionally losing contact to prevent borrowers from repaying, refusing to accept transfers and demanding cash payments, requiring funds to be sent to private accounts, and then introducing another "settlement" company to refinance old debts with new loans, rolling the debt and interest into several times the original amount. Collection efforts escalate to mass contact list bombing and doorstep harassment, culminating in applying for forced execution with complete bank transaction records, notarized creditor's claims, and even effective judgments. Common misconceptions among victims include believing they must repay according to the contract amount, mistaking accounting records for actual loans, deleting chat and call logs, continuing to borrow to pay off debts as instructed by collectors to solidify the fraudulent chain, and failing to appear in court after being sued, leading to default judgments. Unlike issues such as estate settlements, collection harassment, or partnership debts, this case focuses on determining the authenticity of the creditor's claims and how civil and criminal procedures intersect. The timeline typically involves luring victims into the scheme, signing blank or secret contracts, fabricating transaction records, charging high interest rates, maliciously creating defaults, transferring debts for settlement, and employing soft coercion tactics or filing fraudulent lawsuits for enforcement. Key red flags include discrepancies between contract amounts and actual disbursements, same-day or short-term repayment requirements, cash payments without receipts, artificially created defaults, and being directed to borrow new loans from related parties to repay old debts.

II. Key points of contention

The disputes can be divided into five groups. The first group concerns how to determine the principal amount: when the contract amount, the amount on the IOU, the bank transaction records, and the actual amount received are inconsistent, which one should be taken as the basis? Can the upfront interest and the pre-deducted interest be included in the principal amount? Can the excess interest already paid be refunded or offset? The second group focuses on the validity of the contract: how to identify blank contracts, dual contracts, collusive false representations, and hidden actions? Can the borrower claim that the contract is invalid or revoke it? How to uncover the true relationships between the intermediary, the guarantor, and the affiliated lender? The third group deals with the intersection of civil and criminal law and procedural coordination: when the case involves suspected fraud, false litigation, extortion, or illegal debt collection, should the criminal case precede the civil case or proceed concurrently? Should the court transfer the case to the public security organ? Should the ongoing civil litigation be suspended? Can the notarized creditor's rights instrument be applied for non-enforcement? How to apply for a retrial or a third-party revocation of the effective judgment? The fourth group focuses on the burden of proof and evidence organization: when the lender claims that the debt exists, they must prove the actual delivery; when the borrower defends against the claim of fictitious increase, they must present the full transaction records, transfer certificates, chat and call records; how to uncover the facts of fabricated transaction records, cash repayments without receipts, and being induced to sign blank documents. The fifth group concerns time limits and remedies: there are statutory time limits for reporting a case, defending against the claim, providing evidence, applying for non-enforcement, and appealing and applying for a retrial. Missing any of these steps may jeopardize the defense of the true principal amount.

III. Professional analysis by Hengluo Lawyers

To analyze such disputes, first separate the nominal creditor's rights from the actual delivery into two accounts. The rules of the Civil Code of the People's Republic of China (effective January 1, 2021) regarding loan contracts, prohibition of usurious lending, pre-deduction of interest, and false declarations of intent determine that the principal should be recognized based on the actual amount received. If the accounting records immediately transfer or withdraw the same amount immediately after receiving the loan, it cannot prove the true lending. For the second account, check whether the default was artificially created and whether the transfer of accounts to settle the debt forms a new chain of false additions. By arranging the various contracts chronologically and marking each loan disbursement, transfer, withdrawal, and repayment, it is often possible to see that the same sum of money is circulating between related accounts. For the third account, check whether the other party uses notarized creditor's instruments or false litigation to turn false creditor's rights into enforcement grounds. The Civil Procedure Law of the People's Republic of China (amended on December 24, 2021 and effective January 1, 2024) provides procedures for sanctions against false litigation, non-enforcement of notarized creditor's instruments, and retrial and third-party rescission suits. The Criminal Law of the People's Republic of China (amended and effective March 1, 2021) and the Criminal Procedure Law of the People's Republic of China (amended on October 26, 2018) respectively stipulate relevant crimes and procedures for reporting, supervision of case filing, and transfer of cases. When handling creditor-debtor and enforcement cases, Hengluo Lawyers often remind borrowers to avoid two major mistakes: first, continuing to repay based on false amounts or using loans to repay loans, thereby solidifying the false chain; second, failing to appear in court after being sued, thereby surrendering the opportunity to defend the principal and apply for transfer or non-enforcement. The arguments of both parties are relatively fixed: the lender holds promissory notes, accounting records, and notarized creditor's instruments to claim full repayment, while the borrower defends against usurious interest, false accounting records, maliciously creating defaults, and applying for transfer or non-enforcement. Fixed types of evidence include the original loan contracts and blank promissory notes, full bank account statements, proof of account receipt and withdrawal, chat and call recordings, collection records, various contracts for transferring and settling accounts, notarized creditor's instruments, and enforcement documents. It is essential to retrieve all account statements and mark each transaction to reconstruct the closed loop of "contract amount - actual receipt - transfer - available balance".

IV. Practical suggestions and legal basis

The normative basis should be listed separately according to civil and criminal cases. On the civil side, it includes the Civil Code of the People's Republic of China (implemented on January 1, 2021) and the Civil Procedure Law of the People's Republic of China (amended on December 24, 2021 and implemented on January 1, 2024). On the criminal side, it includes the Criminal Law of the People's Republic of China (amended and implemented on March 1, 2021) and the Criminal Procedure Law of the People's Republic of China (amended on October 26, 2018). On the cost side, it also refers to the "Method for Payment of Litigation Fees" (implemented on April 1, 2007). It is recommended to proceed in six steps: 1. Immediately stop repaying loans based on inflated amounts and using loans to repay loans. Print and stamp all transaction records from the bank and annotate each transaction, including loan disbursement, reversal, cash withdrawal, and repayment. 2. Preserve contracts, IOUs, chat records, audio recordings, collection notices, and materials for transferring and settling accounts. Do not modify or supplement signatures. 3. Calculate the actual principal, i.e., the actual amount received minus the repaid amount. Excess interest paid can be claimed for refund or offset. 4. Report suspected criminal cases to the public security organ and request a case acceptance receipt. Demand that related civil cases be transferred or suspended in accordance with the law. 5. Actively defend against lawsuits, raise defenses such as the principal defense and the defense of false intention, apply for non-enforcement of notarized creditor's rights documents, and apply for retrial or third-party revocation suits against effective judgments as appropriate. 6. Calculate and record the deadlines for defense, evidence presentation, non-enforcement, appeal, and retrial. For step-by-step guidance on actual delivery calculation and non-enforcement, please refer to our firm's materials.The "Creditor-debtor relations and enforcement case services" sectionFor cases involving complex chains of ownership or those that have reached the execution stage, it is advisable to have them assessed by professional lawyers before proceeding further.

5. Henglu Law Firm's Advice

In the trap loans, three accounts must not be overlooked, and three points must be remembered. Do not acknowledge the account according to the contract amount; check the actual amount received to determine the principal. The upfront interest and fictitiously increased amounts are not protected. Do not delete transaction records and chat logs; do not sign new settlement documents. Each supplementary signing may be used as debt confirmation. Do not choose between reporting the case to the police and defending against lawsuits. The two approaches can be parallel and mutually supportive. The receipt of the case report is often a key material for civil defense. When calculating the account, three items must be considered: the nominal loan amount, the actual amount received, and the amount already repaid. Separate the subjects, materials, and key points: the subjects include lenders, intermediaries, related parties in transferring and settling accounts, notary offices, and enforcement courts; the materials include all transaction records, original contracts, transfer vouchers, audio recordings, case report receipts, and notarized loan instruments; the key points include case reporting and acceptance, transfer or suspension, defense and evidence presentation, refusal of enforcement, and appeal deadlines. In Beijing, the review of bank transaction records and delivery facts is more rigorous. It is more reliable to restore the fund closed-loop in a legal and traceable manner than to deny the loan verbally. For the identification of false litigation and the organization of enforcement remedies, please refer to the relevant materials.The section on creditor-debtor relations and enforcement cases of our firm.

VI. Frequently Asked Questions

Q1: Can I still repay the loan according to the actual amount received if I have signed two loan contracts with falsified principal amounts?

Yes, the principal shall be determined based on the actual amount received, and the fictitiously increased portion and the interest deducted in advance are not protected. The Civil Code of the People's Republic of China (effective January 1, 2021) clearly stipulates that the interest on loans shall not be deducted in advance from the principal. The interest deducted in advance shall be returned according to the actual amount borrowed and calculated with interest; if the "yin-yang contracts" and blank promissory notes constitute collusion and false statements, the actual delivery shall prevail in determining the true borrowing relationship. To make such a defense, it is necessary to organize the complete transaction records, receipt certificates, transfer and cash withdrawal records, chat logs and audio recordings into a chain to prove that the contract amount does not match the actual amount received. The interest paid based on the fictitiously increased amount can be claimed for refund or offset against the remaining principal. Don't assume that the full amount is established just because you've signed the contract, and don't continue to repay according to the other party's requirements. First, restore the closed-loop of funds and then discuss the amount.

Q2: Which reversal records in the bank transaction records can expose the fictitious increase in debt?

The most crucial point is the multiple transactions of equal or nearly equal amounts that are transferred back to the lender or related accounts on the same day or within a short period of time, as well as the records of immediately withdrawing cash and returning it, and transferring to third-party accounts according to the other party's instructions. These indicate that the booked amounts are just accounting entries rather than actual deliveries. When retrieving the records, it is necessary to obtain the full transaction details and stamp them, marking the date, the counterparty's account name and number, the amount, and the summary for each transaction. Then, these should be listed in a table alongside the amount in the IOU, the contract amount, and the actual available balance. Expressions such as "transfer it back first and then lend it" and "just go through the motions" in chat records, call recordings, cash withdrawal receipts, and surveillance footage are all corroborating evidence of reverse transactions. According to the Civil Procedure Law of the People's Republic of China (amended on December 24, 2021 and implemented on January 1, 2024), it is possible to apply for a court investigation order to retrieve the counterparty's account details, supplementing the unilateral transaction records with two-way evidence. Without the counterparty's information, it is difficult for judges to accept the claim of artificially inflated amounts based solely on the party's own transaction records.

Q3: After reporting the predatory lending case to the police and subsequently suing to confirm the invalidity of the contract, do I still need to pay the acceptance fee in advance?

For pre-payment, the acceptance fee for civil cases has nothing to do with whether a report has been made. The standard is implemented in accordance with the "Measures for the Payment of Litigation Fees" (effective April 1, 2007). If the contract is confirmed to be invalid and does not involve the amount of payment, it is usually charged on a per-case basis for non-property cases; if the claimant also requests the return of overpaid amounts and compensation for losses, the litigation subject amount will be accumulated in stages, and the losing party will bear the cost or share it according to the proportion of responsibility. When filing the case, the plaintiff shall pre-pay the fees first. Lawyer's fees are determined according to the entrustment contract, which may be charged on a per-case basis, based on the subject amount, or on an hourly basis. There is no unified government pricing for these fees. Before taking action, it is necessary to confirm whether the quoted price includes investigation and evidence collection, cooperation in reporting the case, first-instance litigation, and enforcement. Those who have financial difficulties can apply for deferred payment, reduced payment, or judicial assistance in accordance with the law. Attaching the report receipt to the civil case file can help explain the criminal background of the case, but it does not exempt the obligation to pre-pay the acceptance fee.

Q4: Is there a time limit for the public security organ to make a decision on whether to initiate a case or not after receiving a report?

There is a time limit. After accepting the case, the public security organ shall make a decision to initiate or not initiate a case within the statutory review period and notify the complainant. If the case is complex and needs to be extended, it shall be handled in accordance with the law and informed to the complainant. The specific information shall be specified in the case acceptance receipt and the written decision. The Criminal Procedure Law of the People's Republic of China (amended on October 26, 2018) stipulates the review of non-initiation of a case and the supervision channels for the public security organ to initiate a case. After receiving the notice of non-initiation of a case, the complainant may apply for review, request an explanation of the reasons, or report to the people's procuratorate. When reporting a case, obtaining the case acceptance receipt, submitting the full transaction records and the list of fabricated evidence can help the reviewers quickly determine the nature of the case. If a civil case has already gone to court, the case acceptance receipt can be used as the basis for applying for transfer or suspension. The two procedures should be carried out in parallel. Do not mistake the period of case initiation review as a lull when you don't need to defend or present evidence.

Q5: If you are induced to sign a blank IOU, should you first print the transaction details or report the case to the police on the same day?

First, secure evidence of the account statement and the contract signing background, then report the case. Both can be initiated on the same day, with preserving evidence taking priority. Actions that can be carried out on the same day include: going to the bank to print and stamp the full transaction records, taking photos of blank IOUs, "hidden clauses" in contracts, and traces of ID cards being photographed, exporting chat and call recordings that induced the signing of the contract, writing a written statement describing the process of being induced to sign the contract and noting the time, location, and witnesses present, then organizing the materials for reporting the case and obtaining a receipt of acceptance. Under the Civil Code of the People's Republic of China (effective January 1, 2021), the principal is determined based on the actual payment. The discrepancy between the transaction records and the original contract is the most direct evidence. Do not confront the other party or sign any additional documents first, nor delete or modify chat records. Secure evidence and standardize your statements first, so that subsequent reporting and litigation will not conflict with each other.

This article is written based on the common judicial interpretations in the Beijing area. If the case occurs in other regions, it is recommended to consult local lawyers to verify the regional differences.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Legal services for creditor-debtor disputes·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current laws and regulations and publicly available adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.