Xiaomi pulls all P2P lending ads after accusations of promoting fraudulent financial products

Chinese smartphone manufacturer Xiaomi has pulled all ads promoting peer-to-peer (P2P) services from its smartphones. The move comes after the company received complaints that fraudulent and ill-moderated financial products were being promoted within its MIUI operating system.

Xiaomi received 429 complaints relating to related risky P2P lending platforms, involving a total of RMB 40 million. The company said the total included the total user funds involved and not the money that has been lost, according to local media.

Yesterday (July 24), Xiaomi users reported that the fraudulent ads were being shown in Xiaomi VIP System Tasks and Xiaomi Sports. The latter is built into Xiaomi’s MIUI operating system and allows users to collect rewards for completing specific tasks, such as downloading videos.

In July 2017,  Xiaomi increased its marketing of P2P platforms. As a result, the company made a total of RMB 1.9 billion, or 9.4% of its total revenue, from the promotion of ads in the first quarter of 2018.

When Xiaomi reviews advertisements for approval it requires companies to submit an ICP certificate to prove registration with Chinese authorities, the amount of time the company has operated, proof of registered capital, and a mandatory risk warning.

“Therefore, we were able to provide users with the P2P platform address and contact information we have,” Xiaomi is quoted as saying.

Xiaomi isn’t the only big tech company that has found itself in the spotlight following allegations of P2P financing fraud. On June 10, a crowd of people that had bought products from JD.com’s Feixun (斐讯) gathered in front of the company’s headquarters, claiming that they were“victims of P2P finance.”

Under the pretense of being able to get refunds for buying physical products after downloading an app, users were offered opportunities to invest in financial products in order to get their refunds faster.