The Allocation Of Civil Liability For Fraudulent Use Of Credit Cards In China

With the development of banking and electronic technology, the bank-issued cards have been so widely used as to have become indispensable means of payment in China. While the credit cards, one type of the bank-issued cards, are making efforts to become the most promising mediums of payment, due to the overdraft feature which changes people's consumption concept. However, many people do not tend to use credit cards; some of them base their ideas on the dislike of the excessive consumption, while some of the others base their ideas on the concern of the loss of improper uses, especially the loss resulting from the use of lost credit cards. For example, the loss is fixed in the event of losing cash. However, the loss of losing a credit card is relatively uncertain, which leads to the potential recipients. This paper mainly focuses on who should bear the amount of transaction when a credit card is not used by the recipient.The meaning and the history of credit cards are firstly discussed. Then pursuant to whether the issuing bank and the acquiring bank (merchants'bank of deposit) are the same bank, credit card transactions can be divided into external-bank transactions and internal-bank transactions. Followingly, the two processes and the legal relationships are introduced, which are the bases of the analysis of civil liabilities and exemptions. After that, the author describes the meaning, forms and processes of the fraudulent use of credit card and discusses the legislative defects, coupled with the judicial problems and the industry regulations on fraudulent use of credit card. In this way, the author concludes that the issuing banks'exemption is irrationality and it is necessary to analyze the legal responsibilities with the perspective of breach of contract. Finally, the author systematically clarifies the circumstances for which the issuing banks, acquiring banks, merchants and the recipients should be responsible, followed by the corresponding exemptions and the burden of proof.This paper is divided into three parts. ChapterⅠis an overview of credit card and its legal relationships, including the meaning and the history of credit card industry, coupled with the transaction processes in both external-bank transactions and internal-bank transactions. Based on the basic introductions, the author then discusses the legal relationships in each type of transaction which are the theoretical foundations of the allocation of liabilities discussed below.ChapterⅡfocuses on the objects of discussion and defines the meaning of fraudulent use of credit cards. Based on the thorough research of legislative, judicial, and industry status in China, the author analyzes the current judicial problems, and defines the limitation of this issue.The third chapter is the main body of this paper. The author enumerates the circumstances under which the issuing banks, the acquiring banks, the merchants and the recipients should be responsible for the loss. What's more, the exceptions from liability and the burden of proof are introduced respectively. In this way, the allocation of responsibilities is introduced in the views of both substantive and procedural law.