The Central Bank and the China Banking Regulatory Commission have specifically notified the adoption of measures to prevent credit card risks
"Notice of the People's Bank of China and the China Banking Regulatory Commission on Issues Related to Preventing Credit Card Risks"
Yinfa [2006] No. 84
1. Credit card issuers should strictly review applicants’ information, strengthen risk control and management, and educate cardholders on safe card use
(1) Credit card issuers should conduct strict credit review of the applicant's information, and in particular, verify the authenticity of the applicant's information through various methods. For application materials submitted in batches by card issuance and marketing outsourcing service providers or units, card issuers should increase their credit review efforts. Card issuers must strictly review and approve credit limits based on the applicant's credit status and strengthen risk control at the source of card issuance.
(2) Credit card issuers should carefully select card issuance and marketing outsourcing service providers and strictly restrict the outsourcing relationship with card issuance and marketing outsourcing service providers.
1. Before selecting a card issuance and marketing outsourcing service provider, card issuers should fully review and understand the business conditions, financial status, and actual risk control and responsibility-bearing capabilities of the card issuance and marketing outsourcing service provider.
2. After the card issuer determines the card issuance marketing outsourcing service provider, it must sign a written contract with the card issuance marketing outsourcing service provider to clarify the responsibilities, rights and obligations of both parties. The contract must clearly stipulate that the card issuance and marketing outsourcing service provider has the obligation to keep the applicant's information confidential, is not allowed to apply to become a special merchant, and is not allowed to subcontract the agency marketing business to other units.
3. Card issuers should develop strict internal control systems for card issuance and marketing outsourcing service providers, supervise them to establish complete personnel files and produce relevant marketing and promotional materials.
(3) Once the card issuer discovers that the credit card application materials were submitted by an intermediary company that has not signed a card issuance and marketing outsourcing agreement, it shall not accept the relevant business.
For card issuance methods such as collecting cards on behalf of others and mailing cards by others, card issuers should prevent business risks by formulating relevant business rules such as risk prevention and control measures.
(4) Card issuers should strengthen the monitoring of cardholders' card use, and have the right to take measures such as reducing credit limits and stopping payments for credit card holders who have been confirmed to have arbitraged their accounts.
(5) If a card issuer discovers that an illegal intermediary or individual fraudulently obtains a credit card or uses a credit card in violation of regulations, it should immediately communicate and coordinate with the relevant departments such as industry and commerce, public security, etc., and assist the relevant departments to crack down and deal with it.
(6) Card issuers should strengthen the publicity, education and popularization of credit card knowledge to the public, so that the public can understand the basic common sense of credit card application and use, improve risk prevention awareness, and enhance the concept of integrity.
Extended information:
Banks have different preventive measures:
1. Guangfa Bank’s risk management and control of credit cards mainly relies on the “three magic weapons”. First, It is to build the "transaction switch" system of Guangfa Credit Card, which is the first independent risk management platform in the industry that provides cardholders with comprehensive settings for credit card transaction functions.
The system currently has four major management and control functions: transaction limit management, domestic card-less transaction management, Hong Kong, Macao and Taiwan transaction management, and overseas transaction management. Cardholders can use 95508, mobile banking, uplink SMS and other channels to "One-click" to independently set the required trading functions.
In terms of credit review, GF Credit Card innovatively adopts intelligent system review to deal with the shortcomings of manual credit review. In addition, GF Credit Card has also strengthened regional management, focusing on the high-risk Yangtze River Delta and Bohai Rim regions. Based on the consumption characteristics of cardholders in this area, GF Credit Card has adopted measures to control risks from the source, reduce risk exposure, and establish lost connections. Customer management system and other three major aspects of control measures.
The staff of Guangfa Credit Card Center revealed that after the management and control of various business lines, the risk indicators in the Yangtze River Delta region have dropped significantly. In particular, the early risk of new cards issued in 2014 dropped by nearly 40% compared with the cards issued in 2013.
2. Other banks also have different ways to control credit card risks. China Merchants Bank and Shanghai Pudong Development Bank have both established a "front, middle and back" risk management and control system. Taking China Merchants Bank as an example, this behavior prevents credit card fraud and establishes a "front-middle-back" risk management system.
When applying, adopt differentiated review strategies for different applicants; conduct real-time detection during customer use; when accidental misappropriation occurs, China Merchants Bank’s professional investigation team will conduct follow-up follow-up processing to ensure the safety of customer funds.
People's Daily Online-Bank credit card risk control techniques vary