51 Credit Card Under Investigation For Outsourcing Debt Collection Services

51 Credit Card, China’s largest credit card service startup in terms of monthly active users (MAU), saw its share price plummet by 34.32% to $1.77 HKD today following the launch of an investigation into the company’s alleged outsourcing of debt collection agencies.

Witnesses reported that on the morning of October 21, several police vehicles gathered in front of 51 Credit Card’s Hangzhou headquarters to investigate the company’s outsourcing of debt repayment services.

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According to Chinese media, the Chinese credit card company’s executives responded on WeChat, saying that the problem was regarding the company’s “outsourcing of debt collection to third party agencies” and that its “P2P business is normal.”

Chinese media have also reported several issues and complaints raised by the public regarding the company’s financial products, which include high-interest loans, violent debt collectors, harassment, unreasonably high service fees and more.

Founded in May 2012, by Sun Haitao, a serial entrepreneur, 51 Credit Card started with a credit card bill management app 51 Credit Card Manager. The company had since gradually branched out to other financial services including online loans and wealth management.

51 Credit Card raised $310 million in 2016 in a Series C round of funding, according to CB Insights. After a month, the company banked another $ 84 million, totaling its funding to around $509.94 million, according to data by Jing Data.

Investors in the company include JD.com, Xiaomi, GGV Capital, SIG, and Meridian Capital China.