Seizing on the leverage of complaints, a black-market industry has set its sights on financial institutions. On August 7, Shanghai police disclosed to a news outlet the investigation of an illegal agency case targeting securities investment advisory firms. In May of this year, Shanghai Lidoxing Securities Consulting Co., Ltd. (hereinafter referred to as "Lidoxing") reported that its customer service center was suddenly flooded with over a thousand refund calls, and regulatory authorities also received a concentrated wave of complaints. However, most of these complainants had service contracts that had long expired, and the complaint texts, demanded amounts, and phrasing were strikingly similar.

This marks a case cracked by Shanghai police involving "soft violence" extortion in the securities investment advisory industry. On July 30, a coordinated operation spanning three provinces unfolded in Xiangyang and Shiyan, Hubei Province. Under the unified command of the Criminal Investigation Corps of the Shanghai Municipal Public Security Bureau, officers from the Jiading branch, working with local police, precisely struck a criminal group hiding in an office building. With the arrest of 21 key suspects, including Zhang and Gong, the illegal agency case involving extortion of over 3 million yuan impacted dozens of securities investment advisory firms nationwide.

Stealing client information from licensed investment advisory firms and inciting clients to file complaints. "This is not normal consumer rights protection; it's organized 'malicious rights advocacy,'" a Lidoxing official told a news reporter. The company estimated that within just two months, direct economic losses and reputational damage from dealing with these malicious complaints exceeded 20 million yuan. Police investigations reconstructed the group's full modus operandi: The Zhang and Gong group illegally purchased or stole client information from licensed investment advisory firms, recruited and trained telemarketers to contact clients under the guise of a "professional rights advocacy team," promised "full refunds," and incited clients to pressure companies and regulators using standardized scripts. When companies gave in to the pressure and issued refunds, the group extracted a 30% "advocacy service fee."

"They exploit companies' fear of complaint rates and regulatory penalties," explained a police officer from the Criminal Investigation Corps. This logic of "rewards based on making a fuss" has made the black-market groups repeatedly successful. Most Financial Institutions, out of concern for protecting their reputation, often choose to "pay to avoid trouble," which in turn emboldens the criminals. A search on the Black Cat Complaints platform revealed hundreds of complaints against Lidoxing. Multiple investors have complained about the company's marketing practices, including "false advertising" and "induced consumption." One investor from Jiangsu wrote, "During the class, the teacher showed screenshots of high returns, saying following his advice would guarantee profits. After paying tens of thousands in service fees, the recommended stocks kept hitting the daily limit down." Some investors claimed salespeople urged them to pay quickly during live-streamed classes, saying "spots are limited and prices are about to rise," but after paying, they found that the so-called "golden advisor" service was just mass-sent messages. In response, Lidoxing told the reporter that a large portion of these complaints are "malicious refund requests." "Many clients, after receiving services and then suffering losses due to poor market conditions, try to find faults through complaints to get their money back."

Fearing complaints and regulation, the black market preys on Financial Institutions. The battleground for financial black-market activities is shifting. In recent years, black-market activities like "agency insurance surrender" and "anti-collection" have primarily targeted the insurance and credit sectors. With increased enforcement efforts in those areas and fluctuations in the stock market, black-market groups are now turning their attention to the securities investment advisory industry. A report from the Securities Association of China on securities companies' complaint handling for the second quarter of 2026 showed a year-on-year surge of 80.2% in industry-wide complaints, many of which were batch-processed, template-style abnormal complaints. Industry insiders point out that current illegal agency activities exhibit six new characteristics: geographical diffusion, organizational separation, disguised legality (e.g., operating under law firms), batch complaints, targeted precision (focusing on contract-expiring clients), and operational concealment (using false identities). "This is a new type of 'parasitic' model," analyzed a senior compliance expert. "The black market preys on Financial Institutions' fear of complaints and regulation, while also exploiting the mentality of some investors who want to recoup losses. They don't need to create facts; they just need to amplify conflicts to profit from both sides."

In April, the Economic Crime Investigation Bureau of the Ministry of Public Security and the Inspection Bureau of the National Financial Regulatory Administration jointly launched a new round of crackdown operations. The recent Shanghai police action once again sent a "zero tolerance" signal. However, for licensed institutions, cracking down on the black market is only a temporary fix; repairing internal controls is the fundamental solution. A lawyer who declined to be named told a reporter that many institutions, when faced with complaints, often dare not push back due to their own problems and choose to settle matters quietly, which in turn becomes their Achilles' heel exploited by the black market. Police advise that companies should firmly say "no" and report to the police immediately when encountering such situations. But at the same time, companies should reflect on their own compliance management. For the "false advertising" issues that investors have frequently reported on, regulatory authorities also need to intervene to investigate and clarify the boundaries of responsibility.

The reporter noted that many investors initially involved in black-market organizations were simply trying to "seek justice," but unknowingly provided sensitive information like ID cards, bank cards, and account passwords, and even signed "rights advocacy authorizations." This could lead to their personal information being sold, and if they are found to have participated in forging evidence or making false accusations, they also face legal consequences. "There is only a fine line between legitimate rights advocacy and illegal agency," police warned. Investors should resolve issues through official customer service, regulatory bodies, or legal channels, and should not be fooled by online claims of "full refunds" or "inside connections."