Research Into Crime Of Credit Card Fraud

With the increasing debit and credit, it’s convenient to make written or oralagreement on loan for each transaction and it’s a little difficult to match the amount ofloan with each transaction, therefore, the whole society need more convenienttransaction and more rapid settlement in economic activities. Thus, the credit card iscreated. It provides security for safe and rapid transaction, meets requirements ofmodern transactions, implies development trend of financial transaction instrumentsand becomes popular in a very short period. However, due to its technologicalweakness and deficiency in management to some extent, crimes of credit card arefrequently committed.There is not a very long history of credit card in China. At first, it was only asettlement instrument adopted by a few enterprises, but not a transaction instrument inindividual transactions, so it did not enjoy popularity. Therefore, there was no crimeof credit card in the Criminal Law of1979. However, due to its convenient transaction,the credit card won popularity and developed rapidly after it was open to individualgradually. Especially after21stCentury, the number of credit card in China increasedrapidly and it becomes an ordinary instrument. The Criminal Law of1997set forththe crime of credit card fraud in Article196, which was the first criminal provision ofcredit card fraud in China and became the core foundation and criteria of combatingcrime of credit card fraud. However, only in a few years, the legislation was notsufficient for combating credit card fraud due to changes in modus operandi.Amendment V to Criminal Law supplements Item I of Paragraph I of Article196torespond to changes in means of credit card fraud. Thus, the legal frame of crime ofcredit card fraud was formed basically. Meanwhile, with the arising various newproblems in practice, the Supreme People’s Court and the Supreme People’sProcuratorate keep promulgating various judicial explanations to ensure correctpunishment of crime of credit card fraud. However, although the relevant provisions on such crime in both legislative andjudicial fields are relatively mature, and there are rich researches in theoretical circle,these provisions are not perfect and still need discussion.Chapter I studies the historical evolution and development of credit card,legislative and judicial development and current situation of crime of credit card fraud.There are two concepts of credit card, i.e. the one in broad sense and the one innarrow sense. The credit card in criminal field is the one in broad sense includingcredit card, debit card and quasi-credit card. The criminal legislation of on crime ofcredit card fraud was becoming stable and basically able to deal with variety ofcriminal means only after Amendment V to Criminal Law.Chapter II studies the object of crime of credit card fraud. The forged credit cardrefers to the one with inner information forged. The altered credit card shall bedifferentiated between alteration of form and alteration of material information.Altering information in the surface of card shall be deemed as alteration of form, butaltering information in magnetic strip and chip is alteration of material information.The alteration of material information shall be deemed as forging credit card. Theidentity certificate in the credit card obtained by fraud through false identitycertificate shall be explained in narrow sense excluding credibility certificate. Thevoid debit card has its special meaning and is not typical void credit card. Other’scredit card refers to other’s lawful credit card. The criminal objects of crime of creditcard fraud in the form of malicious overdraft include credit card obtained fraudulentlyby real identity but false credibility certificate, credit card shared by a couple andcredit card with agreement on repayment responsibility besides the holder’s creditcard.Chapter III studies objective behavior of crime of credit card fraud in generalforms. Paragraph I of Article196of Criminal Law sets forth four items of crime ofcredit card fraud with great differences of characteristics between the first three onesand the fourth one. In practice, the first three ones are referred to as crime of creditcard fraud in general forms. Picking up or keeping in custody other’s credit card andusing it is regarded as false use. Obtaining other’s credit card by criminal means and using it is punished according to the principle of more severe crime absorbing theother crime except that using other’s credit card which is stolen by the user isconvicted as crime of theft. Forging or fraudulently applying a credit card and using itis convicted as crime of credit card fraud, but we shall make a distinction whether theforged or fraudulently obtained credit card is the one used. When a unit forges a creditcard and uses it, the natural person commits the crime of credit card fraud and suchunit commits the crime of forging financial instruments and certificates. Using a voidcredit card can be included by other behaviors according to its nature, so it issuggested to delete such item. The behavior of using other’s credit card throughinternet shall be convicted as false use of other’s credit card. Using forged credit cardor using other’s credit card account through internet shall be convicted as false use ofother’s credit card, and stealing credit card information and using them throughinternet shall be convicted as crime of theft.Chapter IV studies the crime of credit card fraud in the form of maliciousoverdraft. The crime of credit card fraud in the form of malicious overdraft mainlyincludes five kinds of modes: basic mode, arbitraging mode, authorized consumptionmode, supporting card by card mode, and mode of collusion from both within andwithout. Firstly, when understanding overdraft, it shall be noticed that the prescribedlimit of credit card is changeable and the limit of a quasi-credit card shall becalculated after excluding disbursement. The agreement is an excluding element forrecognizing exceeding limit. The overdraft consumption and borrowing cash inadvance share the same credit limit and shall comply with the principle of the sameaccount. Secondly, when understanding overdraft for a period exceeding theprescribed time limit, it shall be noticed that the longest limit is not fixed. Theminimum repayment is an excluding element of exceeding the prescribed time period.The minimum repayment only allows delay in repayment of overdraft within creditlimit, which shall include interest and other expenses. Whether the overdraft for manycredit cards in the same account is exceeding the prescribed time limited is judgedaccording to the whole account; when there is overdraft in many credit cards indifferent accounts, we shall find out which account has overdraft exceeding prescribed time limit firstly and then calculate the amount of crime; on the other hand,the capital of a number of credit account with overdraft exceeding prescribed timelimit shall be consolidated and the total amount shall be regarded as the amount ofcrime. The refusal to make a repayment after collection is the necessary elements forrecognizing malicious overdraft. It’s a progress that the judicial explanation sets forththe standard of twice collection, but there is some unreasonableness. It is moresuitable to take five times of collection as the minimum times of collection. Of course,it still needs scientific discussion and verification to set forth five times of collectionin legislation. If this can not be achieved all at once, we shall do it step by step.For collection, we shall judge its validity. Firstly, it must be guaranteed that theoverdraft person is actually served on the collection. There are deficiencies in currentmode of written collection which shall be corrected or discarded; the judicialcollection is not a valid collection in the sense of criminal law; the entrustedcollection is valid only in the name of issuing bank; the public notice of collection isnot a valid collection. Secondly, if the issuing bank can not serve the collection on thecard-holder, we can not blindly recognize the latter as being guilty. If there is realevidence proving that the card-holder escapes, the issuing bank’s obligation ofcollection may be lessened. Thirdly, the card-holder must be seriously and formallyinformed of the criminal liability for not making a repayment. Fourthly, there shall bereasonable interval (suitably ten days) between valid collections. Fifthly, thecollection before the expiry of time limit is not a valid collection from the perspectiveof criminal law.If part of overdraft money is repaid after collection, it shall be in the limit ofminimum repayment of credit card. The minimum repayment is not always10%. Theminimum repayment=10%of consumed money within credit limit+100%of cashborrowed in advance+100%of unpaid amount of minimum repayment in the lastterm+100%of money exceeding credit limit+100%of expenses and interests. Thelonger the default is, the more close to100%the amount payable by the card-holder is.It complies with legal provisions and will not cause mismanagement on bank capital to permit make a repayment in the amount of minimum repayment after collection, soit shall be applied.Chapter V studies purpose of illegal possession in crime of credit card fraud. Thesubjective aspect of crime of credit card fraud in general forms shall include thepurpose of illegal possession. The law expressly sets forth the subjective aspect ofcrime of credit card fraud in the form of malicious overdraft include the purpose ofillegal possession, but the means by which the card-holder obtains bank capital isgenerally lawful and there is no unlawful means. The illegal in subjective aspect isunreasonable and unpractical and thus shall be deleted. In addition, it is necessary tofurther explore the standard of subjective aspect of the purpose of illegal possession inthe crime of credit card fraud in the form of malicious overdraft determined byjudicial explanation. The Item I If the card-holder is unable to make a repaymentwhen he/she is definitely aware of not being able to make a repayment and make a lotof overdraft, Item II If the card-holder spends the overdraft money without anyrestraint and is unable to make a repayment and Item V If the card-holder spends theoverdraft money on unlawful or criminal activities are close to objective culpabilityand too severe, so they need improvement. We shall change the standard ofinformality, delete Item V, and do research to ease standard reasonably when judgingwhether the actor has the purpose of illegal possession or not.Chapter VI concentrates on research into some difficult issues of crime of creditcard fraud. The first one is the study on amount of crime of credit card fraud in theform of malicious overdraft. The overdraft amount shall exclude interests, the totalamount of consumption shall be calculated when the payment is made on installment,the repayment by the bank is not a valid repayment of credit card, the discount doesnot belong to overdraft money, the actual consumption shall be regarded as theamount of overdraft in redemption activities, and the interpretation of excludingcompound interest, late fee, procedure fee and other expenses charged by the bankshall be amplified. When calculating amount, we shall pay attention to discriminatethe different mode of dealing with interest in different stages of normal overdraft andmalicious overdraft and must not exclude interest all without any exception. The second one is the dispute on whether unit crime shall be set forth for thecrime of credit card fraud. There is no unit crime of credit card fraud in the criminallaw, but there is unit credit card in reality and some units conduct malicious overdraftfor the interest of units, so there is dispute in theory. On one hand, we shall complywith the principle of legally prescribed punishment for a specified crime. Becausethere is no provision in criminal law, the behavior of credit card fraud committed by aunit shall be punished by prosecuting the executive and the person being directlyresponsible for such behavior in the name of the crime of credit card fraud. On theother hand, setting forth unit crime is mainly for solving a problem on punishment andwill impose little influence on a natural person’s criminal liability. It is not suitable toadopt double-punishment system even unit crime is set forth. And in practice, thereare few units committing crime of credit card fraud which occupies a very smallproportion of a big base number, so it is of little significance to set forth unit crime.The third one is the method to determine the amount when different means ofcredit card fraud co-exist. Firstly, although two patterns of crime of credit card fraudare set forth in different items of the same article, the crime is the same, so we shallnot divide the behaviors and impose combined punishment for several crimes. It issuitable to convict one crime, i.e. crime of credit card fraud. Secondly, if behaviors ofcredit card fraud in general form and in the form of malicious overdraft constitutecrime at the same time, it doesn’t matter to convict the card-holder of any crimebecause the name is the same, i.e. crime of credit card fraud. In situation where twobehaviors do not constitute a crime separately but do constitute a crime after theamounts are combined, the behaviors may be recognized as crime of credit card fraudin the form of malicious overdraft, because it does not seem suitable to regard abehavior with less harm as one with more harm. If a part of behavior constitutes acrime, but other part does not constitute a crime, the behavior may be considered ascrime according to the former part.The fourth issue is to explore the independent name of crime of credit fraud inthe form of malicious overdraft. There are different subjects, different time points ofcreating purpose of illegal possession, shortage of logic in amount conversion method and other problems between crime of credit card fraud in the form of maliciousoverdraft and crime of credit card fraud in general form, and the former reflects moreabuse of credit card. Therefore, the crime of credit card fraud in the form of maliciousoverdraft shall enjoy independent crime name.The fifth issue is the criminal conviction of behavior occupying other’s capitalafter selling credit card. There are different opinions on the nature of maliciouspretended card selling mainly including crime of fraud, crime of encroachment, crimeof theft and crime of credit card fraud. When doing research, we shall discriminatevarious behaviors, the first one is that the actor sells a card; the second one is that theactor occupies the capital in the card after reporting the missing card, the third one isthat the buyer commits a certain behavior. In addition, among suspected criminalbehaviors, we shall sort out independent and complete constitutive elements of crime.The seller, with general intent, is a one-sided accomplice of the buyer who commits acrime; the seller who reports the missing card shall be convicted of theft in the amountof total sum in the card. The two behaviors shall be sentenced of combinedpunishment for several crimes.The sixth issue is the study on unlawful behavior relevant to consumption card.Firstly, the wrongful use of bearer consumption card of a business can not berecognized as crime of credit card fraud. Secondly, the improper use of registeredconsumption card of a business can not be deemed as crime of credit card fraud, butsuch kind of card is safeguarded by pin number and can be reported as a missing card,the improper user does not completely occupy the whole capital in the card beforefinishing the consumption, so there are some differences in calculating amountbetween registered consumption card and bearer consumption card. At last, bankconsumption card can not be considered as credit card from the perspective ofcriminal law due to lack of name registration and enjoys no essential distinction withbearer consumption card of a business. The wrongful use of bank consumption cardcan not be considered as crime of credit card fraud.To sum up, to do research into relevant concepts, constitutive elements anddifficult issues of crime of credit card fraud from the perspectives of theory and practice is beneficial to make judicial standard clear, improve legislation and thenreasonably regulate crime of credit card fraud.