China Consumers Association: Beware of the three major consumer traps of high-priced rentals, arbitrary charges, and hidden locks in mobile phone leasing

Source: People’s Daily Online

People’s Daily Online Beijing, March 25 (Reporter Sun Boyang) Today, in response to issues arising in the mobile phone leasing industry, the China Consumers Association issued a consumer risk warning. The association reminds consumers to be vigilant against the three major traps in mobile phone leasing: “high prices for rent,乱扣费, and hidden locks.”

Beware of the hidden costs and implicit fee traps behind “low monthly rent”

The China Consumers Association investigation found that some mobile phone leasing platforms emphasize “low monthly rent” and “easy leasing” in their promotions, but the actual consumption costs far exceed expectations. The total cost of “lease and buyout” or “end-of-term buyout,” which includes rent plus buyout fee, is often 1.5 times or more the market price of the phone. When consumers are preparing to buy out the phone, some platforms also impose unreasonable fees such as “违约金 (liquidated damages),” “service fees,” and “remote unlock fees.” Additionally, there are illegal financial activities like “lease-to-loan,” where fraudsters falsely claim to lease phones but actually engage in high-interest lending, with annual interest rates often exceeding 400%, constituting illegal usury. Consumers should carefully read contract terms before signing, calculate the total cost of “lease and buyout” to obtain ownership, and compare it with market prices. Do not be fooled by superficial low monthly rent. If funds are needed, use正规 financial institutions, and do not trust such “leasing” financing schemes lightly.

Beware of “regulatory locks” that pose risks of personal privacy leaks and loss of property control

The investigation found that to prevent consumers from defaulting, many platforms install “MDM locks” (Mobile Device Management locks) on leased phones, which set remote restrictions. If abused, this technology can pose serious risks to consumers. Platforms can remotely lock the phone, rendering it unusable, even if consumers have paid the buyout fee as agreed. Some platforms may also threaten consumers with additional charges based on this lock, severely infringing on consumers’ rights to dispose of their property. If the “MDM lock” has excessive permissions, platforms might also monitor consumers’ privacy information such as contacts, photos, and location in real-time. In case of disputes or overdue payments, they could use this information for aggressive collection, harassing or threatening consumers and their relatives. Moreover, once the phone is remotely locked, important personal data, photos, files, and other digital assets stored on the device may become unrecoverable, causing irreparable losses.

Beware of fee traps in “standard terms” and “auto-renewal” settings

The investigation revealed that many leasing platforms set up numerous obstacles in transaction rules, causing consumers to suffer financial losses with slight negligence. After returning the phone as agreed, platforms often deduct deposits citing “damage” to the phone, which are usually normal signs of use or only visible under magnification. During the inspection period, some platforms continue to calculate the leasing period and automatically deduct fees. Platforms often require consumers to enable password-free payments or auto-renewal; in disputes, they may deduct penalties, rent, and other fees without consumer confirmation, making it difficult for consumers to prove their rights. Additionally, some platforms claim “lease completion grants ownership,” but in reality, require separate buyout payments; claim to be lock-free but secretly install “regulatory locks”; promise discounts worth thousands of yuan, but when consumers request redemption, the phone is locked, with claims and promises severely mismatched.

The China Consumers Association reminds consumers to choose rationally, buy according to needs, fully understand the total costs involved in leasing, weigh the pros and cons of “rent” versus “buy,” and avoid impulsive purchases. Carefully review contracts, understand all clauses, especially those related to buyout conditions, total costs, breach responsibilities, overdue handling, and privacy policies. Be aware of technical control measures like “MDM locks.” Keep evidence such as leasing contracts, chat records, promotional pages, and payment receipts. In case of consumer disputes, 【Download the Black Cat Complaint App】, first try to negotiate with the operator; if unsuccessful, report to relevant administrative authorities or file a complaint with the consumer association. Legal channels can also be used for resolution. Stay alert and avoid illegal activities. Be highly cautious of schemes claiming to lease but actually engaging in high-interest lending. Do not participate, and if you suspect illegal or criminal clues, report promptly to public security authorities.