Research On The Risks And Legal Countermeasures Of The Prepaid Cards

In recent years, the prepaid consumption has influenced our daily lives widely.The various kinds and uses of prepaid cards are in the all walks of life, and have agreat deal of impact on people’s consumption habits. There are two types of prepaidcards in the market: one type is multi-use prepaid cards which can be used in manyspecial merchants, such as okcards, smart cards; the other type is single-use prepaidcards which can be used only in the issue companies themselves, such as supermarketcards, cosmetic cards, gym cards. The two types of prepaid cards involve a largenumber of participating subjects and the circulation of cards, and play a similar role tobanks as the liquidation organizations. However, there is no specific legislation toregulate the prepaid cards. So the prepaid cards have accumulated a lot of risks in theprocess of issue, use and deposit, such as infringement on the legitimate interests ofconsumers, misappropriation of deposit capital. On the other hand, the regulationprocess of the prepaid cards in our country shows that, the market needs of theprepaid cards determine that the regulatory policy should turn from “forbidding” into“leading”. Therefore, this paper aims to analyze the legal risks of prepaid cards, andput forward specific regulatory strategies to mitigate the risks, in order to guide the prepaid card market to develop healthily.Chapter Ⅰis an overview of the prepaid cards, analyzing the prepaid cards’definition, features and legal relations and proposing the causes and ideas thatanalyzing multi-use prepaid cards and single-use prepaid cards respectively. And thenthis paper discusses the development course of prepaid cards, beginning with thatcourse abroad, in contrast to the changes of our prepaid cards from “forbidding” into“leading”.Chapter Ⅱis the legal risks of the prepaid cards. The legal risks can beclassified as two types of consumption risks and the risks of issuance and acceptance.Consumption risks lie in the fraud on the consumers, unfair format contract terms, theviolations of consumers’ choices and fair dealing rights, the violations of consumers’privacy issues. This paper analyzes each legal risk and points out the legal remedies.The issuance and acceptance risks lie in the risks of misappropriation of depositcapital, the risks of money laundering, corruption risks, the risks of tax administration.This paper analyzes the causes and consequences of each risk, and finds the cut pointsfor the strong regulatory measures.Chapter Ⅲ is the regulatory measures of the prepaid cards. According toconsumption risks, this paper puts forward that launching model contracts, setting upthe “blacklist” rules and emphasizing the function of the consumer protection agency.According to the issuance and acceptance risks, this paper firstly analyzes the realname registration rules, and the non-cash purchase rules, then according to thedifference between the multi-use prepaid cards and the single-use prepaid cards, thispaper aims to discuss the regulatory measures, such as the qualification of issuers, therules of deposit, anti-money laundering obligations, tax administration.