Research On Legal Prevention Of Factoring Fraud

With the rapid development of factoring industry in China,factoring business is faced with frequent judicial disputes and high risk of fraud.Factoring fraud can be divided into three types from the procedure:fabricate basic transaction contract before factoring,fabricate accounts receivables in the performance of factoring contract,and the conflict of rights in the repayment stage,which can not be returned.The high profitability of financial fraud,coupled with the imperfectness of factoring enterprise management norms and operating procedures,leave space for fraud.In addition,the legislative rank of factoring industry is low,judicial practice operation lacks unified standards,and the construction of social credit system still has a long way to go.The disciplinary force of factoring fraud is weak.All of those easily lead to fraud.In order to regulate the operation of the factoring industry and lower the risk of fraud,the Civil Code regulates the factoring contract as a nominate contract,and combines the general rules of the transfer of claims under the contract and the rules of security rights under real rights in the Civil Code,in response to normal questions,which has greatly promoted the progress of the factoring industry,but further explanation is needed.For example,the definition,scope and number of services to be provided by the accounts receivable under article 761 are unknown;In Article 763,the scope of "knowingly fictitious" of the factoring is too narrow,and it is not properly connected with the provisions on fraud in the General Principles of Civil Law.The scope of the "essential certificate" in Article 764 and the consequences of not having a certificate are not specified;It is not clear what is the "just reason" for changing or terminating the underlying transaction contract,and it is difficult to apply uniformly in judicial practice.In terms of recourse factoring,there many explanations for the statement of "it is possible to...can also......".In the non-recourse factoring provisions,the provisions that "the creditor's right shall be claimed from the debtor" and "there is no need to return the remaining part to the creditor" are inconsistent with the factoring practice.In the provisions of transfer registration of accounts receivable,the limitation of priority compensation to conflicts among multiple factoring contracts makes the scope of validity of registration too narrow.All of the above rules need to be corrected and concreted through legal interpretation to guide judicial practice,especially to prevent the high risk of reasoning fraud In particular,the definition,scope and point of transfer of accounts receivable need to be further clearly defined and the amount of services provided by the reasonable person is clearly ensured;The general rules are consistent with other sub-groups,expanding the scope of "knowing",stipulating the substantive examination obligation of the factoring to fundamentally reduce the fraud of the reason,and clarifying the "necessary documents" in the notification of the assignment of accounts receivable.the scope and the consequences of the factor's failure to attach documents,"no justification" should be explained in the change of the basic contract,and the provisions should be regarded as arbitrary norms,and the factor in the non-recover factoring should bear only credit risk.The effectiveness of registration should be further expanded and developed into a complete accounts receivable registration system.To prevent factoring fraud,in addition to the perfect interpretation of legislative provisions,the management and process should be strengthened,the supervision and disciplinary mechanisms should be improved and the social credit system should also be improved urgently.