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Underground card market turns brisk trade
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AN underground market for bank cards is growing online and authorities at China’s central bank are working to coordinate a clampdown on the illicit trade.
Online stores, forums, blogs and social media platforms are among the major channels where one can find offers to buy and sell bank cards, according to the People’s Bank of China, which recently issued a joint action aimed at stopping such transactions.
In many cases, a debit card can fetch upward of 100 yuan (US$16) online, while cards with online and mobile banking functionality can bring in as much as 1,000 yuan, according to offers found online.
Sellers who can provide ID cards, mobile SIM cards and other information associated with their unwanted bank cards can earn more still.
To many, offloading a spare bank card may seem like an easy way to earn an extra bit of cash. But most of them don’t realize that such cards are often used to facilitate illegal investments and money transfers, according to banking experts.
A search yesterday by Shanghai Daily for “debit card” on Taobao, China’s largest e-commerce platform, yielded at least 10 obvious listings to purchase bank cards for prices ranging from 78 to 300 yuan. Advertisements for bank card purchases were also not hard to find on several of the country’s social media websites.
According to a risk management officer at a Chinese bank who asked to be identified only by the surname Wang, China has long had an underground market for bank cards and bank accounts, and the size of the market has grown steadily with the spread of technology and online banking.
Though online banking transactions can save time for ordinary banking customers, Wang says they can also pave the way for financial crimes among those who would want to avoid sharing their real names with banking staff.
In some cases, those offering to purchase bank cards say they are only collectors interested in commemorative cards or cards with unique designs.
Wang warns that cards sold to such buyers are often used in money laundering, tax evasion, fraud and bribery cases. In cases where such crimes are noticed, they are usually traced back to the card’s original owner, who many have a difficult time convincing authorities of their innocence.
To clampdown on the trade in bank cards, the People’s Bank of China recently announced that it would cooperate with authorities in the Ministry of Industry and Information, the Ministry of Public Security, the National Administration for Industry and Commerce and the National Internet Information Office. The country’s central bank also called on retail banks to step up their own efforts to reduce this phenomenon.
Yet, given the ease associated with buying and selling cards, authorities are likely to face an uphill battle. Negligence on the part of banking staff is also seen as another obstacle to curbing the illicit market.
Under current policies governing bank cards, it is clear that lending, renting or selling one’s bank card is prohibited. However, it is very difficult to punish offending parties, says Wang. Even if violators are found, current measures offer little clarity on how they should be punished.
Cards obtained by criminals using another person’s identity poses another issue that authorities will have to confront.
At present, bank tellers require customers to show a valid ID in their name to open a bank account. A new generation of ID cards embedded with microchips can help separate real cards from fakes, yet proving that the card belongs to the person presenting it is another matter, one based solely on the judgement of the teller.
In a recent investigative report aired on CCTV in March, an undercover reporter was able to open bank accounts at three of China’s four biggest banks with an ID card purchased online. One teller approved the application without question. Another two tellers questioned the reporter’s identity, but later approved his application after he insisted that he was the card’s rightful owner.
Only a teller at China Construction Bank refused the reporter’s application after noticing that a new ID card with the same identity had been issued in 2010, while the card presented by the reporter was issued in 2007.
“Many bank tellers, especially those in small banks, may not refuse an account-opening application even though they noticed potential identity discrepancies,” says Jeff Jiang, an employee at China Construction Bank.
It is also possible, according to bank sources, that tellers approve account applications to avoid potential customer complaints and also to help the performance of their employers.
Wang believes that a second form of ID should be required in cases where suspicious activity is noticed. Yet, he concedes that such a change may not be possible without related support from policymakers.
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