China banks warned against credit card fraud

China banks warned against credit card fraud

Beijing prosecutors called on banks to review credit card applications more carefully, a move prompted by a recent spike in fraud.

Credit card fraud accounted for most of the more than 1,000 economic crime cases that courts in the national capital dealt with from 2010 to 2012, and prosecutors expect the number to keep rising.

Failing to pay balances was the most common offence, while most of the others involved fraudulent credit card applications, the city procuratorate said.

In the past two years, the Chaoyang district has prosecuted 660 people suspected of credit card fraud, while the Xicheng district has prosecuted 264.

"Credit card fraud boomed in 2012 along with our district's fast economic development," said Lu Junzhao, director of financial crime for Xicheng's prosecuting authority.

He said reports of the crime last year were nine times what they were in 2011.

Nearly two-thirds of defendants were unemployed but were able to apply for cards without providing all the required documentation, a key reason for the spike in fraud, he said.

Zhu Haiyan, a prosecutor in Dongcheng district, said people without fixed incomes were the biggest offenders.

Although banks do have strict procedures for credit card applications, many employees have eased qualifications for applicants or even failed to verify identities, Zhu said.

In one case she handled, two defendants succeeded in getting credit cards using a copy of a colleague's ID card. A bank employee saw one of the applicant's signatures was not the ID cardholder's, but approved the application anyway.

Wang Hai was convicted of getting a credit card using fake income and real-estate certificates at a bank in Dongcheng and then running up debt of more than 90,000 yuan (S$17,963).

A bank worker named Zeng in Chaoyang even used his position to get a card in his mother's name to improve his work volume and get a bigger bonus, said Ye Ping, a prosecutor in the district.

"For some credit cards with large credit limits, banks pay great attention to applicants' information," said Li Shuang, an employee responsible for bank credit in a Beijing-based financial company. "But with the smaller limits, the process becomes careless, resulting in many unqualified applicants being approved."

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