Is it permissible to hit a friend who is extorting me financially after I discovered his bad character?

Keeping away from bad company is a salvation, as Allah Almighty says: "Close friends on that Day will be enemies to each other, except for the righteous" (Surat Az-Zukhruf, 67), and as the Prophet, peace and blessings be upon him, said: "A man is upon the religion of his intimate friend, so let one of you look at whom he befriends." Your avoidance of this person is a good deed if you have tried to advise him and he did not take heed. However, his pursuit of you does not justify your assaulting him by hitting or cursing; as Allah Almighty says: "And do not transgress. Indeed, Allah does not like transgressors" (Surat Al-Baqarah, 190). Moreover, suppressing anger and forgiving are characteristics of the righteous. The problem can be solved by informing your family to intervene or by contacting this person's family to restrain him.