Investigation on the chaos of credit card raising and cashing： the diversification of cashing methods is difficult to find
Some consumers rely too much on credit card overdraft consumption and fall into the situation of "repaying loans with loans" and "raising cards with cards", which leads to tight funds and doubled repayment pressure; Some consumers also illegally use credit card loans in non-consumption fields such as real estate and securities, which enlarges the leverage of funds, easily leading to unsustainable personal or family finances and risk accumulation of financial institutions.
Consumers should correctly understand the function of credit cards, rationally overdraw their consumption, and do not "keep the card with the card" or "repay the loan with the loan", let alone "borrow it for a long time", and give full play to the consumption support function of consumer loan tools such as credit cards.
In order to solve the problem of credit card cashing, it is more important to strengthen the enforcement of credit card supervision, in addition to building a comprehensive prevention and control project such as relevant legal system and bill collection norms
On June 29th, the Consumer Protection Bureau of China Banking and Insurance Regulatory Commission, China issued the fourth risk warning in 2020, reminding consumers that they should correctly understand the functions of credit cards, use them rationally, establish a scientific concept of consumption, spend rationally and overdraw moderately.
China Banking and Insurance Regulatory Commission said that in recent years, the credit card business has developed rapidly and has become an important part of the bank’s retail business, which has played a positive role in promoting residents’ consumption and facilitating residents’ lives. However, the problems in the process of using credit cards have become increasingly prominent.
Recently, a survey by the reporter of Legal Daily found that some consumers rely too much on credit card overdraft consumption, take on large credit card loans beyond their repayment ability, and even fall into the situation of "repaying loans with loans" and "raising cards with cards", which leads to problems such as tight funds and doubled repayment pressure; Some consumers illegally use credit card loans in non-consumption fields such as real estate, securities, funds, wealth management, etc., which will easily lead to unsustainable personal or family finances and bear corresponding consequences, and also lead to the accumulation of risks in financial institutions.
Over-reliance on overdraft consumption, card financing is tight.
On June 9th, the People’s Bank of China released the General Situation of the Payment System in the First Quarter of 2020, which showed that the total outstanding credit of credit cards overdue for half a year was 91.875 billion yuan, accounting for 1.27% of the credit balance of credit cards. As of the end of the first quarter of this year, the total amount of outstanding credit overdue for half a year has approached the highest amount in two years.
According to a survey conducted by the reporter of Legal Daily, some consumers avoid credit card repayment by means of "keeping cards by cards", that is, by handling credit cards of different institutions and using different repayment dates to realize circular repayment.
Ms. Zhang, a citizen of Chongqing, has used the method of "keeping a card with a card" for almost five or six years. She has handled different credit cards in three banks, and realized credit card repayment and transaction in different banks through her own POS machine. Without withdrawing cash, she only needs to bind a savings card with a POS machine, and the consumption and repayment of different credit cards can be realized by using the savings card. The monthly circulating repayment fund is about 10,000 yuan.
"The repayment date of each month is my most anxious time, for fear of being blacklisted if I miss the repayment date." Ms. Zhang said.
Similar to the method of "keeping a card with a card", consumers use the principle of credit card to enter and leave the bill, and postpone the repayment of this month’s money until next month or indefinitely.
According to a survey conducted by the reporter of Legal Daily, there are a lot of posts on the Internet similar to "How to repay the 10,000 yuan credit card bill with 500 yuan". According to such posts, as long as consumers make any payment on any day between the payment date and the repayment date of the credit card, any payment will be regarded as repayment, and any payment will be included in the next month’s bill. For example, the post said that if there is a credit card that needs to pay back 10,000 yuan, only 500 yuan is in hand. At this time, you only need to deposit the 500 yuan between the billing date and the repayment date, and then use the third-party platform to brush it out. Every operation, the deposited 500 yuan will be counted as repayment, and the brushed 500 yuan will be counted as next month’s bill. Go back and forth for 20 times, and you can pay off the credit card bill.
For such a repayment method, the industry believes that this move will not cure the symptoms, and the credit card arrears of 10,000 yuan have not actually been paid off. "It is just to postpone the arrears this month to next month. In addition, the cardholder also needs to pay a certain handling fee to the payment platform, and 10,000 yuan will probably need 75 yuan. ".
The risk warning document issued by China Banking and Insurance Regulatory Commission Consumer Protection Bureau also indicated that consumers should correctly understand the function of credit cards, rationally overdraw their consumption, and not "keep the card with the card" or "repay the loan with the loan", let alone "borrow it for a long time", and give full play to the consumption support function of consumer loan tools such as credit cards.
There are many ways to cash out, which are hidden and difficult to find.
Recently, several commercial banks have adjusted the credit card points rules, and the People’s Bank of China has also solicited opinions from the society on the Notice on Strengthening the Management of Payment Acceptance Terminals and Related Services (Draft for Comment). These adjustments have aroused social concern about credit card cashing.
The so-called credit card cashing means that the cardholder does not withdraw cash through normal legal procedures (ATM machines or bank counters), but withdraws the credit line in the card in cash through other illegal means without paying the withdrawal fee to the bank.
It is understood that at present, there are many cash-out methods circulating in the market, such as using QR code to scan the code to obtain cash for third-party payment platforms, using POS machines to obtain cash, and using third-party software to consume credit cards, and then returning them to consumers in cash.
The reporter of "Legal Daily" learned on a credit card cashing website that consumers can choose their own virtual goods corresponding to their cashing amount, and then pay by credit card as required. After the transaction is completed, relevant personnel will transfer the balance after deducting the handling fee to the "Cashier" through cash transfer. During the whole cashing process, consumers did not buy any products in the practical sense.
At the same time, the "Legal Daily" reporter noticed that there are also many credit card cashing advertisements in the WeChat circle of friends. Some people claim that they can use their credit cards to withdraw cash, and the starting price in 800 yuan is.
Zhang Dan (pseudonym), a Beijing citizen, made a similar transaction. One day, Zhang Dan saw a credit card cashing advertisement in the WeChat circle of friends, and just as he needed a sum of money urgently, he expressed his willingness to cash out. After communication, Zhang Dan scanned the code and paid 2000 yuan to the designated account according to the other party’s request, and was immediately told that "there is an error in the system at present, and it is temporarily impossible to withdraw cash". The other party told Zhang Dan that he would try again in a few days to withdraw the cash successfully. However, a few days later, when Zhang Dan asked about the cash withdrawal again, he was told that the merchant had "run away" and suggested calling the police.
According to the investigation by the reporter of Legal Daily, such fraudsters generally use the software of adding friends in batches to add the victims as friends for various reasons, and then publish the cash-out information of various channels through the circle of friends, and entice netizens to contact them with low handling fees and quick cash withdrawal. In addition, they will also publish some screenshots of their successful transactions with customers and their favorable comments, so as to increase their credibility. When the victims pay, they will find various reasons to postpone the withdrawal, or directly blacken the victims.
An online merchant told the "Legal Daily" reporter that when they provide customers with credit cards and other means of payment, they all need to provide certain fees to banks or related financial institutions. In order to avoid paying this handling fee, many businesses are reluctant to provide credit cards, flower beds and other means of payment. In addition, for many young people, rent is a big expense, and most landlords’ accounts are private accounts, which only support cash transactions or transfers. In this case, credit cards can’t meet the consumption in some fields, and the legal withdrawal fee is relatively high, which leads people to use credit cards to cash out.
The Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues Concerning the Specific Application of Laws in Criminal Cases of Impairment of Credit Card Management, which came into effect on December 1, 2018, clearly states that "using point-of-sale terminal equipment (POS machines) and other methods to directly pay cash to credit card holders by fictitious transactions, false pricing, cash return, etc., if the circumstances are serious, they shall be convicted and punished for the crime of illegal business operation in accordance with the provisions of Article 225 of the Criminal Law".
According to Yin Zhentao, director of the Financial Technology Research Office of the Institute of Finance of China Academy of Social Sciences, in the past, most people usually used POS machines to cash out their credit cards. However, because POS machines are the card terminals of banks, they are easy to be found when they are often used, and the handling fee for swiping cards with POS machines is high, so at present many people use third-party payment channels such as QR code scanning payment to achieve the same function. In addition, some people also use some design mechanisms of credit cards to increase the amount of cash. There are also many people who scratch the edge of time or use the information networking between business platforms to find loopholes in the credit card mechanism. With the application of new technology, the characteristics of credit card cashing are more hidden and more difficult to find.
With the rapid development of consumer credit, the risks behind it cannot be ignored.
In November, 2019, the Research Report on Post-90s Credit Card Consumption Scenarios released by Guangfa Bank showed that in recent years, under the influence of new formats in internet plus, Internet consumer credit has risen rapidly. Internet consumer financial products launched by major e-commerce companies emerge in an endless stream, such as Ant Flower Garden, JD.COM White Strip and Free Pay, which are deeply loved by young people who love online shopping because of their low application threshold, simple procedures and convenient use. They are the products that many "post-95 s" first tried credit consumption.
Encouraged by capital and financial technology, China’s consumer credit market is experiencing explosive development, and all kinds of credit institutions tend to target younger "Generation Z" young people who lack stable income sources.
Yiborui, an information service company, believes that Internet consumer credit institutions bluntly promote the concepts of "long tail customers" and "sub-optimal customers" and guide credit institutions to lower the loan threshold and sink the customer base; At the same time, the problem of joint debt is becoming more and more serious. In order to delay the risk outbreak, some institutions cover up the stock risk by means of loan restructuring, borrowing new ones and returning old ones.
"In the process of using credit cards, the main problem for consumers is that they don’t understand credit cards, such as whether the annual fee is paid and the consequences of defaulting on the annual fee. Therefore, when applying for and using a credit card, consumers should fully understand the credit card-related information such as credit card interest settlement rules, billing date, annual fee/penalty payment method, etc. In addition, consumers are excessively charged with personal sensitive information and even personal privacy information when applying for a credit card. " Li Aijun, director of the Legal Research Center for Financial Innovation and Internet Finance of China University of Political Science and Law, said in an interview with the reporter of Legal Daily that for commercial banks, there are mainly risk control problems, risk tips for consumers and repayment tips when issuing credit cards.
Yin Zhentao also told the reporter of Legal Daily that at present, in the process of using credit cards, the problems of risks and illegal consumption have become increasingly prominent. Especially among some young people, there has been a rapid rise in personal leverage. They use the method of "keeping cards with cards" to pay back money alternately by handling credit cards of various institutions.
"This phenomenon is very obvious at present. It will not only accelerate the rise of personal leverage, but also increase the probability of default risk. Another problem is the crime around credit cards, which mainly focuses on the issue of cashing out with credit cards. " Yin Zhentao said.
Strengthen comprehensive prevention and control, and strengthen supervision and enforcement.
Affected by the COVID-19 epidemic, the credit card business of commercial banks generally experienced a decline in card issuance and transaction volume and an increase in overdue rate in the first quarter of this year.
A number of interviewed industry insiders said that in the short term, credit card loans are still in the risk exposure period, but both the amount of cards issued and the transaction volume are currently in the process of steady recovery. At the same time, in response to the impact of the epidemic, a number of banks have stepped up efforts to promote credit card consumption and accelerated the recovery of collection capacity.
In fact, banks are more sensitive to risks. Recently, many banks have begun to strictly control risks by blocking cards and reducing quotas.
Recently, a number of credit card holders "spit out" that they have recently received a short message of notice of reduction from banks, including large state-owned banks and joint-stock banks.
According to insiders, at present, all major banks are strengthening risk management and control in the whole process, and there is generally no large-scale or sudden reduction of credit cards. However, as one of the normalized risk control measures, banks will regularly adjust the quota of some high-risk customers, and implement a more prudent new customer access strategy and improve the efficiency.
Regarding the risk warning of the China Banking and Insurance Regulatory Commission Consumer Protection Bureau about the correct use of credit cards, Li Aijun believes that it is mainly due to the concentrated outbreak of complaints in the credit card field.
Li Aijun specifically analyzed: First of all, the credit card issuing agency’s review and risk control of the applicant is a mere formality, relying too much on the deterrence of criminal responsibility as a means of risk control, and failing to carefully review the applicant’s credit status and repayment ability; Secondly, some card-issuing banks unilaterally adjust the credit line, and it is unclear to inform the service charges in advance; Third, some card-issuing banks set up overlord clauses in credit card preferential activities, unilaterally changed the rules of activities, and failed to honor preferential treatment, causing consumer dissatisfaction; Fourth, some card-issuing banks have some problems, such as the failure to fulfill the notification obligation, the nonstandard marketing and publicity, the nonstandard card-issuing management and the inadequate outsourcing management.
"This risk warning is mainly aimed at the two prominent problems of risky consumption and illegal consumption. It is to guide ordinary financial consumers to use credit cards reasonably, including the control of leverage and understanding the function of the credit card itself, that is, it is a function of installment payment, not a function of investment and financial management, and not a function of borrowing." Yin Zhentao said.
A number of bankers said that despite the short-term epidemic, in recent years, with the deepening and accelerated application of various financial technology means, banks’ risk identification for individual customers has become more accurate.
The above-mentioned risk warning document issued by the Consumer Protection Bureau of China Banking and Insurance Regulatory Commission also pointed out that if there is arrears or annual fees of credit cards, it will generate interest costs and may also affect personal credit information. When spending by credit card, consumers should plan their funds reasonably and arrange and manage their personal or family funds well.
In Yin Zhentao’s view, the regulatory framework and rules in the field of consumer finance are relatively rich and perfect, and the users of credit cards are better than those in other stages of consumption. "In the whole process of governance, illegality and prevention are the problems of spears and shields. Although the shield is very strong, the spear will also increase its aggression."
Yin Zhentao suggested that in order to solve the problem of credit card cashing, it is more important to strengthen the enforcement of credit card supervision, in addition to building a comprehensive prevention and control project such as relevant legal system and bill collection norms.
"In the past two years, there have been a lot of fines around credit cards, which is actually increasing the illegal cost, thus imposing certain constraints on relevant subjects. Of course, in this process, it is necessary to gradually introduce more normative documents or increase penalties according to the new situation and new technologies, or use window guidance to regulate. " Yin Zhentao said.
(The original title is "Investigation on the chaos of overdraft consumption" repaying loans with loans "and" raising cards with cards "using illegal loans for non-consumer credit cards" raising cards ")