Recently, the Supreme People’s Court and the Supreme People’s Procuratorate issued the Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate on Issues concerning the Specific Application of Law in Criminal Cases Involving Obstruction of Credit Card Administration (the “Interpretation”), which went into effect on December 1, 2018. The Interpretation specifically stipulates the elements for offenses such as forgery and fabrication of financial instruments, the undermining credit card administration, credit card fraud and unlawful business operation.
Article 1 of the Interpretation states that those who forge one or more credit cards or more than 10 blank credit cards by duplicating another person’s credit card, writing another person’s credit card information onto a magnetic strip medium or chip, or by any other means shall be deemed to have committed the offense of forging financial instruments. In case of 5 to 25 forged credit cards, if the deposit balance or credit line of a single forged credit card or the total deposit balance or credit line of all forged credit cards is more than RMB 200,000 but less than RMB 1,000,000, or in case of 50 to 250 forged blank credit cards, the offense shall be considered serious. The offense shall be considered especially serious if there are over 25 forged credit cards; if the deposit balance or credit line of a single forged credit card, or the total deposit balance or credit line of all forged credit cards, exceeds RMB 1,000,000; or if there are over 250 forged blank credit cards involved.
Articles 2 and 3 of the Interpretation state that a person who knowingly holds or transports more than 10 but less than 100 forged blank credit cards, or illegally holds more than 5 but less than 50 credit cards of others shall be deemed as a case involving a “large sum” under the offense of undermining credit card administration. A person who knowingly holds or transports more than 10 forged credit cards, or knowingly holds or transports more than 100 forged blank credit cards, or illegally holds over 50 credit cards of others, or provides forged credit cards for others or fraudulently receives over 10 credit cards by using false identity certificates shall be deemed as a case involving a “huge sum” under the offense.
Using the identity cards of their holders against their wishes, such as the resident ID cards, military officer’s cards, solder’s cards, Mainland Travel Permits for Hong Kong and Macau Residents, Mainland Travel Permits for Taiwan Residents, or passports, or using forged or fabricated identity certificates to apply for and receive credit cards shall be considered as “using a false identity certificate to fraudulently receive a credit card.”
In case of stealing, buying, and illegally providing credit card information of others to an extent sufficient to forge a usable credit card or to allow others to engage in transactions in the name of the credit card holder where more than one but less than five credit cards are involved, it shall be regarded as an offense of stealing, buying or illegally providing credit card information. If more than five credit cards are involved, the case shall be deemed to involve “a huge sum.”
Articles 5, 6 and 8 of the Interpretation stipulate the circumstances where a person’s credit card is being used by an impersonator, used in malicious investments, while also confirming the scope of circumstances that will be deemed “a huge sum.” In case of credit card fraud through forged credit cards, credit cards fraudulently received using false identity cards, invalid credit cards, or credit cards used by impersonators, if the amount involved is more than RMB 5,000 but less than RMB 50,000, the offense shall be deemed as involving a “relatively larger sum”; if the amount is more than RMB 50,000 but less than RMB 500,000, the offense shall be deemed as involving “a huge sum”; and if the amount exceeds, RMB 500,000, the offense shall be deemed as involving an “especially huge sum.”
If a lost credit card of another person is found and used, or if a credit card of another person is fraudulently obtained and used or if the credit card information and data of another person are stolen, bought, obtained by fraud or otherwise acquired by other illegal means for use via the Internet or communications devices, all such acts shall be deemed as fraudulent use of other people’s credit cards.
In case of a malicious overdraft where the cardholder exceeds the required limit or fixed-term credit line for the purpose of illegal possession, and where such amount is not returned in three months despite the bank conducting two lawful collection efforts, if the amount is more than RMB 50,000 but less than RMB 500,000, such offense shall be deemed as involving “a relatively large sum”; and if the amount is more than RMB 500,000 but less than RMB 5,000,000, the offense shall be deemed as involving “a huge sum”; and if the amount is more than RMB 5,000,000, the offense shall be deemed as involving “an especially huge sum.”
Article 6 of the Interpretation states that whether illegal possession was intended should be determined by considering the cardholder’s credit history, repayment ability and willingness, the status of credit card application, receipt and overdraft, the use of overdraft funds, the performance after overdraft, and reasons for failure to repay pursuant to applicable requirements. An intent for illegal possession shall be found in the following cases: Massive overdraft with knowledge that there is no repayment ability; an overdraft as a result of a credit card applied under false credit information; evasion of bank collection after overdraft through hiding or change of contact methods; surreptitious withdrawal of funds, transfer of funds, concealment of property or evasion of repayment; and use of overdraft funds for criminal activities.
Article 12 of the Interpretation covers illegal operations and the determination of the amount involved. An offense of illegal operation is found for unlawful use of point of sale devices (POS devices) and other methods to directly pay cash to credit card holders through fictitious transactions, false prices or cash refunds. If the amount is more than RMB 1,000,000, or if a fund of more than RMB 200,000 owed to financial institutions is overdue, or if an economic loss of more than RMB 100,000 is incurred by financial institutions, such offense shall be deemed serious. If the amount is more than RMB 5,000,000 or if a fund of over RMB 1,000,000 owed to financial institutions is overdue, or if an economic loss of over RMB 500,000 is incurred by financial institutions, the offense shall be deemed especially serious.
The Interpretation specifies in detail the concentration of offenses which undermine credit card administration and stipulates the scope of amounts determined amounts so that convictions and sentencing may be done with greater certainty.