Credit Card Fraud Countermeasures

Letter of credit (L/C) is the most important approach to pay and settle accounts in international trade settlement. It is much safer to employ L/C to close an account than to use other methods, for when using L/C commercial credit is replaced by bank credit: L/C is an independent document, not depending on trade contract; besides, what bank deal with in the process is not goods, but receipts, and therefore, given that credits and receipts are identical in nature, bank assumes the first class responsibility of payment. However, it is because the inner defects lying in its payment principles of independent abstraction and rigid consistence, and other factors such as the different countries and regions where the interested parties are located and the incessant lust of the involved, that make the increase in risk of using L/C and give rise to great varieties of cheat in its intercourse.L/C cheat poses crucial threat to various circles such as international trade, shipping, banking and insurance. The victim' s indirect loss and its ensuing social consequence towards national economy will be far greater than its direct loss. It is because of its great hazard to almost every corner in the world that every country invests in tremendous manpower and material resources to guard against L/C cheat. But with the increasingly scientific and technological development, its method will be much more tortuous and veiled; thus, counter L/C cheating strategy must develop in consistence with the time. Therefore, through theoretical analysis, case study and experience summary, this article explicitly discusses the counter measures to preclude L&C cheat from both the micro and macro aspects, which, makes it easier in terms of micro-manipulation and macro-control.The first part of this article is an overview of the L/C system concerning elementary theory. It starts with its definition, litigant, running procedure, main feature and various judicial relationships, followed by the concept, causes, main methods of L/C cheat, and its relationship with discrepant surrendering document, the distinction with informal usage, and several parts that constitute the necessary elements of L/C cheat.The second part deals with the micro-countermeasures to preclude L&C cheat. This part first discusses the pre-counter-measures in terms of importer, exporter, bank and the preventative measures that every litigant could take to forestall L&C cheat, and then it expounds on the control countermeasures after the event.The third part is the macro-countermeasures to guard against L&C cheat. From the perspective of legislature, judicature and execution, this part deals with this matter from the level of domestic law counter strategy. Later it stresses that L/C cheat can be effectively checked through signing international treaty, enhancing international cooperation and founding international organization.What is most important in regard to the research concerning L/C cheat and its counter strategy, are width and depth. On the basis of widely absorbing the fruit from predecessors, we spare no effort to put forward our own opinion concerning L/C cheat and counter strategy, and hoping it can serve as certain message contributing to the perfection of L/C system. We also sincerely hope that it could be of some help to import and export enterprises and banks using L/C for payment and account settlement. Lastly, to our professors, experts and professionals, we humbly ask you to give us your valuable advice and criticism.