Yang Ying, an art teacher in northeastern China, entrusted 480,000 yuan ($76,000) to a major Internet-based lender, Ezubo, after seeing advertisements on state television, which she took as a sign it was safe.

Just a week later, she was horrified to see news reports that Ezubo, which collected billions of dollars in deposits, had been raided by police who froze a bank account and detained executives. She called city hall in her hometown of Changchun and was told to hire a lawyer, but says she cannot afford that while her money is tied up in Ezubo.

Yang, 31, said she saw Ezubo's advertising on state broadcaster CCTV right before the evening news, but "what really persuaded me is the advertising on the variety show on Anhui Satellite TV," a prominent regional broadcaster. "Pretty famous stars are on that program," she said.

The seizure of Ezubo has added to tensions over private sector Chinese finance companies that have been battered by a wave of defaults due to an economic slump, triggering protests by depositors.

Regulators allowed private sector lending to flourish with little oversight over the past decade to support entrepreneurs who create China's new jobs and wealth but are largely shut out of lending by the state-owned banking industry.

Regulators tightened controls after declining economic growth led to defaults and protests. The finance industry as a whole has come under tougher scrutiny after a plunge in stock prices in June led to accusations of insider trading and other offenses.

Ezubo was seized Dec. 8 on suspicion of raising money without the required licenses, according to the official Xinhua News Agency. The business magazine Caixin reported the chairman of its parent company, Yucheng International Holdings Group Ltd., was detained by police and 40 to 50 other employees were questioned.

Authorities are scrambling to head off possible protests over Ezubo, which news reports say had 4.9 million depositors, making it much larger than other private lenders that have run into trouble.

Ezubo collected a total of 74.7 billion yuan ($11.8 billion) in deposits since its founding on Feb. 25, 2014, according to Xincainet, a financial information website. Other news reports gave similar figures but none said how much the company owed to depositors at the time it was seized. According to Caixin, police ordered CITIC Bank to freeze a 1.1 billion yuan ($175 million) deposit belonging to another Yucheng subsidiary.

Depositors from other parts of China have traveled to Beijing to protest at government offices and the headquarters of China Central Television, according to Yin Jun, an employee of a solar power company in the eastern province of Jiangsu. Yin said he deposited 60,000 yuan ($10,000) in Ezubo.

"The police called to warn me not to complain about the Communist Party in the WeChat group," said Yin, referring to a popular messaging app.

Yin, 22, said he also had been reassured about Ezubo because of its advertisements on CCTV and aboard the national bullet train network.

"We contacted a lawyer, and the lawyer said there are too many things involved in this case, and because it is under investigation now, it is better to wait to see the authorities' decision," said Yin.

Private finance companies attract money by paying more than state-owned banks. The benchmark interest rate of 1.5 percent on a one-year deposit is less than inflation. The Internet has helped draw in deposits from working class or rural depositors, many of them financial novices who have little knowledge of the risks involved.

The money is lent for real estate or other projects, and "if these projects are in trouble, then their investment are in trouble," said Guo Tianyong, a banking expert at the Central University of Finance and Economy in Beijing.

Referring to Ezubo, he said, "What they should do now is to dispose of assets to compensate investors, while the government should step up regulation on companies and education on investors."

The industry's popularity reflects the Chinese public's urgent search for an alternative to low interest paid by banks, which has driven repeated bouts of boom-and-bust speculation in real estate and other assets. It propelled the flood of money from novice investors that fueled this year's explosive rise of Chinese stock prices, which peaked in June and have plunged since then.

Peer-to-peer lenders grew out of a provision of Chinese law that permits small loans from one individual to another. The lenders started out putting savers in touch with borrowers. But some act more like banks, selling certificates of deposit and pooling the proceeds to lend.

Total assets of private finance companies rose to 9.4 trillion yuan ($1.5 trillion) as of the end of June, according to the China Banking Regulatory Commission. It said the industry overall is financially healthy, though defaults are rising.

Yang, in Changchun, said she invested 245,000 yuan ($39,000) in November in a three-month contract with Ezubo that promised a return of 13.4 percent. A week later, she put 235,000 yuan ($37,500) into a one-year contract that promised to pay 14.6 percent.

Yang said police came to her home after she made a reference on her social media account to possibly going to Beijing to file a petition with the central government. It is a common way of seeking redress in China but one local officials try to block for fear it makes them look bad in front of Communist Party leaders.

"They investigated me and took away my computer and cell phone to check because they thought I organized or planned to organize people to petition in Beijing, but I did not," she said.

"I have nothing to do but wait," said Yang. "What I am angry about is that I heard the police have investigated since September. Why did not they take measures a bit earlier?"


AP researchers Yu Bing in Beijing and Fu Ting in Shanghai contributed.