Recently, Mr. Jin from Shenyang reported to a reporter from Securities Daily that last month, a credit card co-branded by a bank and a large supermarket he held was deducted 500 yuan by the relevant bank without notifying him. This money was the supermarket card credit he returned by redeeming points. After inquiry, the bank stated that his credit card was frozen due to suspected business risks and the credit card credit had been deducted. Although after a risk investigation, Mr. Jin’s credit card returned to normal and the credit card fees were returned normally, Mr. Jin still felt puzzled, “Why is a credit card that has been used well suddenly suspected of business risks?”
According to an investigation by a reporter from Securities Daily, a gray channel for cashing out points from the above-mentioned supermarket co-branded credit cards has gradually become clear. Its operation is more cumbersome than other cash-out methods: first, cardholders use POS machines to swipe their cards for effective consumption to obtain points. Generally, the handling fee applied for in advance is relatively small. Use a POS machine that has high points but can earn points to cash out the card for the first time to obtain enough points; after having enough points, use the card to make purchases in the above supermarkets. Then the cardholder applies to the bank's credit card center to redeem the points and return the card payment. Finally, the cardholder sells the goods to cash out.
An intermediary engaged in cashing out credit cards told reporters that this method of cashing out is relatively complicated and is not the most efficient way for intermediaries to make money. However, it is precisely because cashing out is difficult and involves a third-party institution – the above-mentioned supermarket – that it is not easily detected by banks.
Secret cash-out chain
Mr. Jin told a reporter from Securities Daily that this supermarket co-branded credit card is his most used credit card. Its special feature is that not only can you enjoy double points for shopping in supermarkets, but you can also use the credit card points accumulated from past purchases to directly convert them into repayment funds when repaying.
The slogan of the credit card center of the relevant card issuer also states, "Points can be used to redeem your in-store consumption in supermarkets. Every 1 yuan of RMB consumption in the store will earn 2 points, and every 1 yuan of RMB consumption outside the store will earn 1 point. If any fraud or fraud is involved in the accumulation or redemption of points, all accumulated points and redeemed gifts, card credits or flight miles may be canceled by the bank, and the bank also reserves the right to pursue legal liability against the cardholder."
The specific redemption rules are that for each supermarket credit card main card in a single natural year, the cash redemption ratio is 0.25% for 3,000 to 6,000 points, 0.5% for 6,000 to 10,000 points, 1% for 10,000 points and above, and the total number of points redeemed is capped at 200,000 points. In addition, the bank also stipulates that the first 2,999 points will not be redeemed.
Calculated based on a card with 200,000 points, the first 2,999 points will not be counted. The redemption amount within 6,000 points is 3,001 multiplied by 0.25%, which is 7.5 yuan. The remaining 4,000 points within 10,000 points can be redeemed for an amount of 20 yuan. The last 190,000 points can be redeemed for an amount of 1,900 yuan. This means that a credit card can eventually cash out nearly 2,000 yuan in cash.
The telephone customer service staff of the relevant bank told reporters that the application qualifications for the card are not high. Interested customers can apply directly through online banking, and the card can normally be approved within a week.
"After you have a credit card, you can swipe your card to cash out at some specific POS machines. These POS machines are generally POS machines with a points function that have been applied for by the intermediary in advance. Although the handling fees charged by the bank are higher, the income can cover the cost. After all, it is a business without capital," the credit card intermediary said.
The reporter also found that near some department stores or large stores, people who swipe their cards often ask if they need to pay on their behalf, and then get the cash from the real buyer to achieve the purpose of earning points. However, in this process, it is usually necessary to give the buyer some discounts.
When there are enough points in the credit card, the cardholder can go to the supermarket for shopping. Within 60 days after the purchase, submit a cash redemption application to the credit card center of the card issuer. After that, the money will be returned to the credit card in proportion. Finally, the cardholder can directly sell the items to obtain cash.
At present, my country's Consumer Rights Protection Law stipulates 60 days for hassle-free exchange, but according to the current supermarket return and exchange standards, the time is generally extended to 90 days. In other words, if the cardholder encounters problems in cashing out, he can also apply for a return or exchange without causing major losses.
It should be noted that under normal circumstances, the flow of funds between shopping malls and banks follows the principle of "where money goes out, money comes in". Even if the cardholder applies for a return, the refund will be returned to the payment account, and cash returns are not supported. Because there have been many cases of cashing out using this loophole before.
Hard for banks to detect
According to a reporter from Securities Daily, Mr. Jin’s situation is not an isolated case. In July and August, many cardholders applied for cash redemptions from their credit cards but were debited by the bank, and the bank also temporarily froze the credit card. Some cardholders have jointly lodged a complaint with the bank, but have yet to receive a positive reply from the bank.
A relevant person who is engaged in credit card swiping intermediary said that this method of cashing out is very hidden. On the one hand, for bank credit card data, cardholders are making normal purchases and repaying the money on time, and there is no problem; on the other hand, the final sale of the goods by the cardholder is already a personal behavior after the transaction is completed, and 200,000 points is not easy for ordinary people, so only specialized credit card payment intermediaries can do this transaction.
The so-called illegal cashing out refers to changing the purpose of funds through false transactions and using the withdrawn funds for illegal purposes or other prohibited purposes. Take advantage of the subtle differences in prices between the same product or nearly identical products in different markets.
People from Everbright Credit Card Center believe that if cardholders use POS machines to cash out and obtain points, it can be defined as illegal cashing out because no real transaction has occurred. But it is not easy for banks to find abnormalities in credit cards, especially when all data is normal.
"Perhaps the bank discovered that cashbacks in a certain area are very dense and the amount is large, and then they realized the problem. However, the source of everything still lies in the point acquisition of POS machines. There are many POS machines on behalf of them. In order to charge handling fees, some banks are not very strict in auditing," said the above-mentioned credit card payment intermediary.
POS machine chaos
According to the National Development and Reform Commission’s notice on optimizing and adjusting bank card swiping fees, bank card swiping transactions are divided into four major categories: dining and entertainment, general, people’s livelihood and public welfare. The handling fees transferred from merchants are divided by multiple links, including card issuers, acquirers and UnionPay. Most of them are in a ratio of 7:2:1, and some are in a ratio of 8:1:1. This also means that the card issuer gets the majority share.
As a result of the above-mentioned sharing, some card issuers have relaxed the review process in order to seize the market. According to data released by the People's Bank of China on the main entities operating the payment system in the second quarter of 2014, the number of bank cards issued in my country reached 4.540 billion, the number of domestic special merchants reached 9.9303 million, and the number of POS machines reached 13.5813 million.
A person involved in the POS machine industry said that the number of installations is still the main factor in business assessment. The more installations, the greater the commission. As for the risks, they cannot be seen in a short time.
According to a reporter from Securities Daily, the current risk control system of banks can detect abnormal data when a single card is repeatedly swiped at one or several POS machines. Therefore, for intermediaries, one POS machine can no longer meet the demand. After a credit card goes through the complicated cash-out process of several POS machines, it is often difficult for banks to monitor the risks, which also indirectly causes the high incidence of bad debts.
The interim reports of listed banks also showed that bad debts in the credit card business entered a period of high incidence in the first half of this year. Take a bank well-known for its retail business as an example. In the first half of this year, the bank's credit card non-performing loan balance increased by nearly 300 million yuan, an increase of 18.1% from the end of last year, while the credit card loan balance increased by 16.88% during the same period.
