War against credit card tech fraud steps up

A bank clerk in Huai'an city, East China's Jiangsu province, shows a bank card, March 31, 2015. PROVIDED TO CHINA DAILY

Commercial banks have said they are stepping up their risk management of the credit and debit card business, as they face new challenges from criminals amid the rapid development of internet technologies, the China Banking Association said in its latest report.

The extent of the threat was outlined by an official with the economic crime investigation department of the Ministry of Public Security.

Police investigated and prosecuted more than 50,000 credit card fraud cases in 2015, accounting for about one-fourth of their entire economic crime cases, said Che Yaohua.

They also prosecuted 178 cases involving theft, purchase and illegal provision of credit card information during the same year, Che told a news conference for the release of a so-called blue book on the development of the bank card industry by the China Banking Association last week.

One of the new features of the cases shows that a growing number of criminals are moving away from offline to online crime, adopting up-to-date technologies, Che said.

She said they planted Trojan horses into mobile phones via phishing websites and pseudo base stations, committed fraud by using caller ID spoofing to pretend to be a bank's customer service agents, and stole bank card information in bulk.

The blue book listed pseudo cards, false identities and internet scams as the top three types of credit card frauds last year.

"Commercial banks should further improve risk control capabilities, increase investments in information technologies, strengthen the construction and implementation of internal control systems, and reinforce management of bank card business during the whole process," said Huang Jinbo, deputy director of the banking innovation supervision department of the China Banking Regulatory Commission.

"The key is to strike a balance between innovation and risk control. Simply emphasizing customer experience while overlooking safety hazards will harm the financial service industry in the long run," he added.

Fan Shuangwen, deputy director of the payment and settlement department of the People's Bank of China, the central bank, said commercial lenders should use new technologies to improve bank card safety, enhance business management and standardize business processes.

As concerns over card safety keep growing, the China Banking Association advised bank card issuers to apply big data technologies to realize dynamic, refined and real-time risk management.

By the end of 2015, China issued a cumulative number of 5.61 billion debit and credit cards, rising 13 percent from the beginning of the year.