First, it is suspected of illegally issuing loans and operating beyond the scope, disrupting the normal financial order. Illegal credit card intermediaries send trading invitations to unspecified members of the public through advertisements, and advance or provide liquidity to cardholders by repaying due money on behalf of credit card holders or assisting them to cash out false consumption by swiping their cards, from which high handling fees are charged. This kind of behavior violates the relevant laws and regulations of our country and should be banned and severely cracked down.
Second, it increased the credit supply in disguise and weakened the effect of macro-control. With the help of illegal intermediaries, credit card holders use virtual credit card consumption to cash out, and often use the money obtained for business activities or other purposes. This has increased the credit supply of the whole society in disguise, leading to the transformation of consumer credit into production and circulation credit, the long-term use of short-term credit funds, and the further increase of capital liquidity. At the same time, this part of the funds is out of the normal credit management channels of banks, out of the management sight and control of the regulatory authorities, and the effect of macro-control is weakened.
Third, it is not based on real transactions and poses a threat to financial security. On the one hand, illegal credit card intermediary activities have impacted the daily management system of cash and anti-money laundering in the country, making it difficult for relevant departments to effectively identify and track cash-out funds; On the other hand, it increases the operating costs and risks of banks. Once the credit card holder is unable to repay the debt after cashing out, and sometimes even maliciously owes money, the issuing bank will bear the corresponding expenses, the legal fees for malicious overdraft and the write-off fee for bad debts. Especially when credit card cashing is rampant and a large amount of cash is accumulated to a certain scale, the issuing bank will bear a huge risk burden.
Fourth, it encourages the wind of fraud and illegal business operations and destroys the social credit environment. Because of the risk-free income, rampant illegal credit card intermediary activities encourage illegal business, which may induce more special merchants to engage in credit card cashing business and further undermine the social credit environment.
Fifth, it is easy to induce credit card fraud and make innocent people suffer losses. Some individuals even use their identities to apply for credit cards without knowing it. The first "credit card cashing fraud case" in Nanjing reported by the media before is a typical case of illegal intermediary engaging in illegal financial activities. The criminal is a professional criminal gang (involving 5 people), who used false identification to defraud more than 30 credit cards, cashed in illegal overdrafts or made false consumption, totaling more than 600,000 yuan, all of which constituted the crime of credit card fraud.