Credit card scams top list of financial crimes

Credit card scams made up 87 percent of the financial crime cases prosecuted in Shanghai in 2013, topping the list of local financial crimes for the fifth straight year, the city's prosecutor's office announced Monday.

Local prosecutors handled 1,232 credit card scam cases last year, the majority of which - about 74 percent - were cases of malicious overdrafts, according to a press release from the Shanghai People's Prosecutor's Office.

The prosecutor's office blamed financial institutions for the prevalence of malicious overdraft cases. Specifically, the office said financial institutions issued credit cards without checking whether card applicants had the ability to pay back their debts.

It is not a new situation for financial institutions, the prosecutor's office said. Many sought to issue cards to build up their market share without paying much attention to the applicants' bad credit.

The prosecutor's office also pointed out that the financial system lacks a way for credit card issuers to check with other institutions to see whether an applicant is a good credit risk. The situation allowed some people with bad credit to go from issuer to issuer, obtaining new credit cards for the specific purpose of running up balances they never intended to repay.

The prosecutor's office addressed the malicious overdraft problem in a white book on financial crimes for 2013.

Local prosecutors charged 1,609 people in 1,411 financial crime cases last year. The prosecutor's office divided financial crimes into five major categories, including financial fraud, undermining the order of financial management, disrupting market order and abuse of power. Financial fraud cases, with credit card scams chief among them, accounted for 92 percent of the total number of cases.

As more and more online transactions are being paid with credit cards, online retailers and other websites need to keep a close eye on the transaction records of their clients and establish their customers' identity to minimize their risks, the prosecutor's office said.