Wen 丨 Zhong Xin (Judge of the Second Instance) Wang Shuo, Beijing No. 3 Intermediate People's Court
Transferred from: Criminal Memorandum, reprinted only for learning, communication, and popularization of law, I would like to express my gratitude to the copyright owner!
Summary of the trial
Loan products that are attached to credit cards are significantly different from ordinary credit card overdrafts, and should be recognized as a bank credit loan rather than a credit card overdraft. Disputes arising from the credit card holder's inability to repay the part of the loan should not be found to be a crime of credit card fraud, and should be resolved through civil litigation or pursued for criminal liability as a crime of loan fraud.
Case No. First instance: (2017) Jing 0105 Xingchu No. 807 Second instance: (2017) Jing 03 Xingzhong No. 416
Facts of the case
Public prosecution organ: People's Procuratorate of Chaoyang District, Beijing.
Defendant: Wang Zhisheng.
The Beijing Chaoyang District People's Court investigated and ascertained that the defendant Wang Zhisheng applied for a Guangfa Bank credit card in December 2009, and then used the card to overdraft consumption in Chaoyang District, Beijing and other places, with a total of 23,600 yuan in overdraft principal. After repeated collections by the bank, the repayment was not made for more than 3 months. In order to avoid punishment, Wang Zhisheng repaid 100 yuan on December 31, 2016. The defendant Wang Zhisheng was later arrested by the police and has now paid off the principal of the arrears.
Wang Zhisheng has been working in Beijing since 2005 and works in the Beijing branch of a company in Hainan. In 2009, he served as the deputy manager of the production department, with a monthly salary of 4,000 yuan. In 2012, the company's cooperation was terminated, and he continued to work in Beijing, having two sons and a daughter. On November 24, 2009, Wang Zhisheng applied for a credit card of Guangfa Bank through telephone sales by the salesman of Guangfa Bank. On December 3, 2009, China Guangfa Bank issued a credit card with a limit of 23,000 yuan to Wang Zhisheng.
Caizhijin business refers to the personal micro-loan business provided by China Guangfa Bank through credit card, which is applied by the cardholder, and approved by the bank according to the fixed amount after review, and is credited to another debit card of the cardholder at one time. Wang Zhisheng has applied for a total of 3 Caizhijin loans through the credit card of China Guangfa Bank. The first was applied on November 3, 2011, with an advance loan of 10,000 yuan, to be repaid in 12 installments, and the second was applied for on March 16, 2013, with an advance loan of 10,000 yuan, to be repaid in 12 installments. On February 26, 2014, Guangfa Bank transferred the money into Wang Zhisheng's personal ICBC debit card at one time, and Wang Zhisheng needed to repay about 2,400 yuan (principal + interest + handling fee) to his Guangfa Bank credit card every month, and Wang Zhisheng needed to repay a total of about 58,670 yuan with interest at the end of 24 periods, with an annual interest rate of about 15%. During this period, Wang Zhisheng used the credit card normally for small overdraft consumption.
During the period (February 2014 to December 2016), Wang Zhisheng repaid a total of 34,400 yuan to the credit card of China Guangfa Bank, including 13 installments of principal (outstanding) and other overdraft consumption. As of January 10, 2017, Wang Zhisheng still owed Guangfa Bank Caizhijin 23,600 yuan in principal, 22,000 yuan in bill interest, late fees, bill installment handling fees, and 54,600 yuan in Caizhijin handling fees, with a total arrears of 100,000 yuan. Because the company stopped reimbursing Wang Zhisheng's rent, and his wife had no work income after she became pregnant in 2013, his salary was only more than 4,000 yuan, and the main purpose of his borrowing money was to pay rent and maintain family living expenses.
In mid-2015, Wang Zhisheng found that he could not repay the loan and high handling fees, and failed to negotiate with the bank, so he repeatedly refused to answer the collection call. During this period, Wang Zhisheng changed his flat, residence and telephone number without notifying the bank. From May 5, 2015 to January 4, 2017, China Guangfa Bank made a total of 26 calls to Wang Zhisheng's mobile phone, work phone and home phone, and gave a door-to-door notification, with a minimum interval of 4 days and a maximum of 3 months. Wang Zhisheng only answered twice and said that he was unable to repay the loan. On January 10, 2017, China Guangfa Bank reported the case. On the same day, the police arrested Wang Zhisheng.
On January 20, 2017, Wang Zhisheng's wife repaid 23,600 yuan to Wang Zhisheng's Guangfa Bank credit card, claiming that it was the principal. Wang Zhisheng was released on bail on 24 January 2017. During the bail period and before the trial of the first instance, Guangfa Bank continued to collect interest from Wang Zhisheng, and he reached an agreement with Guangfa Bank to repay 20,000 yuan in a lump sum and settle it with Guangfa Bank.
Adjudication
The Beijing Chaoyang District People's Court held that Wang Zhisheng's malicious overdraft of his credit card, in a relatively large amount, constituted the crime of credit card fraud and should be punished in accordance with law. In view of Wang Zhisheng's truthful confession and return of principal, he was given a lighter punishment in accordance with law. Therefore, the verdict: Defendant Wang Zhisheng committed the crime of credit card fraud and was sentenced to 6 months' detention, suspended for 6 months, and fined 20,000 yuan.
After the first-instance verdict was pronounced, Wang Zhisheng was not satisfied and appealed, claiming that the facts found in the first-instance judgment were unclear and the evidence was insufficient, and that it did not constitute the crime of credit card fraud, and that the dispute between him and Guangfa Bank was a loan debt dispute.
After trial, the Beijing No. 3 Intermediate People's Court held that the first-instance judgment did not affirm the fact that there was a Caizhijin lending relationship between Wang Zhisheng and Guangfa Bank, and found that Wang Zhisheng's behavior of defaulting on the principal, interest, late fees, and handling fees of Guangfa Bank Caizhijin was a malicious overdraft of a credit card, which was an error in determining the facts of the case. The Caizhijin involved in the case should be determined to be a pre-loan business between Wang Zhisheng and Guangfa Bank, which is a civil lending relationship and should be resolved through civil litigation. During the trial of the first instance of the case, Wang Zhisheng had reached an agreement with Guangfa Bank to pay Guangfa Bank a one-time payment of 20,000 yuan, and the two parties had settled the business of Caizhijin.
Wang Zhisheng subjectively lacked the subjective intent of illegal possession, and the determination that he had the subjective intent of malicious overdraft and the objective act of malicious overdraft were not supported by evidence. Therefore, Wang Zhisheng did not have the subjective intent of illegal possession, nor did he use the credit card to maliciously overdraft objectively, and his behavior did not constitute the crime of credit card fraud.
In accordance with the provisions of Article 225, Paragraph 1 (3) of the Criminal Procedure Law, the Beijing Third Intermediate People's Court ruled to revoke the criminal judgment of the Beijing Chaoyang District People's Court (2017) Jing 0105 Xingchu No. 807 and remand to the Beijing Chaoyang District People's Court for a new trial.
Later, the People's Procuratorate of Chaoyang District, Beijing Municipality withdrew the indictment.
Commentary
There are two elements to the identification of malicious overdraft credit card fraud, one is malicious and the other is overdraft. In recent years, the discussion on the crime of malicious overdraft credit card fraud has mostly focused on the identification of bad faith, and there has been less controversy about the other element of overdraft. However, with the transition of credit cards to more liberalized, convenient and integrated consumer credit loan products, credit granting methods and repayment methods of credit cards have also evolved, and some financial products have been emerging. [1] Similar to the Caizhijin business of China Guangfa Bank in this case, many banks have launched special cash installment services relying on credit cards in recent years. For this kind of installment business that is dependent on credit cards, some people refer to it as credit card derivative loan services, or special installment loan services,[2] and some people name it loan business because it is similar to loans. [3] For the sake of convenience, the author refers to it as a credit card derivative loan. In discussing whether Wang Zhisheng's conduct constitutes the crime of credit card fraud, a basic question that needs to be clarified is whether credit card derivative loans such as credit card derivative loans, such as the Caizhijin business launched by China Guangfa Bank, are essentially credit card overdrafts? This is also the focus of controversy in this case, and the determination of the nature of the legal relationship involving this case involves the civil dispute or the crime of credit card fraud, or the crime of loan fraud, and the question of whether it is a crime or a non-crime, and whether this crime is another crime.
1. Credit card and credit card overdraft business model
To discuss whether this type of business is a credit card overdraft, it is first necessary to clarify what a credit card is and what the business model of the credit card is. The 2004 Interpretation of the Provisions of the Criminal Law on Credit Cards issued by the National People's Congress (NPC) interprets the meaning of credit cards as defined in the Criminal Law as follows: "An electronic payment card issued by a commercial bank or other financial institution with all or part of the functions of consumer payment, credit loan, transfer and settlement, cash deposit and withdrawal, etc. "There is a view that the function of a credit card includes a credit loan, so such a loan attached to a credit card is a credit card business and can be considered as a credit card overdraft. In this view, although this definition provides a standardized interpretation of credit cards, it cannot highlight the essential characteristics of credit cards, nor can it be simply based on the interpretation that "credit loans" appear, and it is not possible to assume that credit card derivative loans are of course credit card overdrafts. In 1999, the People's Bank of China's Measures for the Administration of Bank Card Business stipulated that credit cards are divided into two categories: credit cards and quasi-credit cards according to whether they deposit reserve funds with the issuing bank. According to the Measures for the Supervision and Administration of Credit Card Business of Commercial Banks issued by the China Banking Regulatory Commission in 2011, credit cards refer to various media that record the relevant information of the cardholder's account, have the functions of bank credit line and overdraft, and provide cardholders with relevant banking services. Credit card business refers to the banking services provided by commercial banks using bank cards with credit lines and overdraft functions. Therefore, the author extracts the characteristics of credit cards and credit card business as follows:
1. Credit extension. A credit card is a credit card issued by the issuing bank to the cardholder based on the cardholder's personal credit, and the bank grants credit to the cardholder on the basis of credit only.
2. The issuing bank reviews the qualifications of the credit card applicant. Since it is a credit line, in order to control the risk, the card issuer needs to review the applicant's identity information, work income and other credit status. Article 41 of the Measures for the Supervision and Administration of Credit Card Business of Commercial Banks stipulates that: "The card-issuing bank shall conduct a credit investigation on the credit card applicant, fully verify and completely record the applicant's valid identity, financial status, consumption and credit records and other information, and confirm that the applicant has a fixed job, a stable source of income or a reliable repayment guarantee." "Theoretically, credit cards have a strict process of application, review, approval, and issuance.
3. Quotas. Similarly, because it is a credit line, the bank grants or increases the credit limit of the credit card, which is a comprehensive credit based on the applicant's credit status. Although there is a temporary increase in the credit limit, it is also a small and short-term temporary extension of the credit line provided by the bank according to the cardholder's credit status and historical card usage.
4. Consumption. Although credit cards also have certain functions for depositing and withdrawing cash and transferring money, their main function is to pay for consumption.
Although in essence, the overdraft function of a credit card is also a kind of loan based on the credit of the cardholder, the way and process of processing a credit card is different from that of a general loan, the review standard is relatively low, and the amount is more conservative than that of a general loan, and the main purpose is for daily consumption. In addition, compared with general loans, credit cards also present a revolving credit-revolving repayment model, although the repayment can be made in installments, but the term is generally shorter, which is a short-term loan. To sum up, credit card is a small-amount, revolving, and unsecured consumer credit business. [4]
2. Business model of credit card derivative loans
The basic characteristics of credit card derivative loan business are as follows from credit card overdraft:
1. From the aspect of application and approval. In general, credit card derivative loans can be applied for through the bank's website, APP or customer service phone, and the loan can be disbursed in a few days without submitting new supporting materials, which is extremely convenient. Only for a small number of credit card derivative loans, the bank will re-examine the applicant's credit status and enter into a special loan contract in accordance with the review standards and procedures for ordinary loans.
2. From the aspect of credit basis. Most credit card derivative loans are also credit lines, the bank determines the credit status of the applicant (that is, the cardholder) according to the historical use of the credit card, and decides whether to approve it. In general, there is no guarantee for the debts incurred in the consumption of credit cards, so it is easier to become the target of criminals' "empty gloves and white wolves" fraud, and there is also room for the criminal law to regulate malicious overdrafts for the purpose of illegal possession. [5]
3. From the aspect of credit line. A credit card is a comprehensive credit line granted by a bank to an individual, and its overdraft limit is determined based on the cardholder's credit history. However, the credit card derivative loans carried out by commercial banks in the mainland, especially those involving large-scale consumption such as automobiles and decorations, can reach hundreds of thousands to hundreds of thousands of yuan, far exceeding the original overdraft limit of credit cards, and more than ten times or even dozens of times the original overdraft limit. Although banks can temporarily adjust the amount of credit cards, most of them can increase the amount of the original overdraft limit by 20% to 1 time, usually not more than 3 months. This type of loan limit is very different from the basic overdraft limit of the credit card and should not be considered as a service to increase the credit limit or exceed the credit limit. [6]
4. From the aspect of use restrictions. Banks limit the types of loans that can be consumed by customers, and even restrict specific merchants and business outlets at the same time, and some have a single minimum consumption limit. Credit cards, on the other hand, only require the cardholder to make legitimate purchases, and there are no restrictions on the specific purpose of use.
5. In terms of loan term. Based on the interval between the credit card date and the statement date, as well as the different delays between the repayment date and the statement date of each bank, the repayment period of each purchase overdraft is at least 15 to 20 days, and at most 45 to 50 days, even if the general consumption installment business is carried out, it is usually up to 12 installments, that is, 12 months, which is a short-term loan. The term of credit card derivative loans is usually at least 1 year, and many are more than 1 year. According to the classification of loans in the "General Principles of Loans" of the People's Bank of China and the China Banking Regulatory Commission, loans with a term of more than 1 year (excluding 1 year) and less than 5 years (including 5 years) are medium-term loans, and many credit card derivative loans are medium-term loans.
6. From the aspect of loans and repayment methods. Credit card is a revolving credit facility - revolving repayment, within the card limit, the number and amount of overdrafts are arbitrary, and after repayment in one cycle, the next cycle starts again. The credit card derivative loan is a fixed loan issued to the cardholder, and the total amount of repayment, the amount of repayment and the interest fee of each installment have been determined at the time of approval, and some loan products also stipulate that the repayment must be made in installments, and the cumulative consumption amount is calculated until the amount granted, and cannot be recycled within the limit.
7. From the aspect of interest policy. There are no additional fees for credit card purchases and repayments. Interest-free borrowing is generally not available for loans between non-natural persons, with the exception of credit card overdrafts. Unless overdue repayment, cash withdrawal, etc., the credit card is generally not charged interest for normal consumption overdraft, the purpose is to encourage short-term, small early consumption, solve the temporary shortage of funds within the scope of personal economic strength, and facilitate daily life. [7] However, credit card derivative loans have a long cycle and a large amount, which are aimed at customers who need to alleviate the long-term capital turnover problem, and the service is opened under different names and charges a certain handling fee under different names, and there is no interest-free period, which is obviously different from credit card overdraft.
Through the analysis of the above aspects, credit card derivative loans can be roughly summarized as: after the cardholder legally obtains the credit card, the loan service that exceeds the credit card overdraft limit and has a specific purpose and term is specially applied to the bank through the credit card account.
3. Credit card derivative loans are not credit card overdrafts
On the face of it, such a special-purpose loan applied for through a credit card account is repaid by credit card every month along with the overdraft repayment. However, this is only the "way" of the new loan borrowing a credit card in the process of capital lending and repayment, and it is essentially different from the general credit card overdraft in many aspects such as the approval process, credit basis, credit line, use restrictions, loan term, lending and repayment methods, and interest and fee policies. With so many different characteristics, although they are essentially credit loans except for auto consumer loans, which may be mortgaged, this business has gone beyond the basic content of credit card services and broken through the normal overdraft function of credit cards, and it is difficult to classify credit card derivative loans into the credit card overdraft category of the crime of credit card fraud as provided for in Article 196 of the Criminal Law.
4. Credit card derivative loans are essentially personal credit loans
From the above analysis, it can be concluded that there is an essential difference between credit card derivative loan business and credit card overdraft. The CBRC's Interim Measures for the Administration of Personal Loans distinguish between credit card overdrafts and general personal loans through civil, commercial and economic laws and regulations other than the Criminal Law, especially the relevant regulations of banks. Credit card derivative loans have more similarities with personal loan business, which are essentially loan businesses in which the bank approves a fixed amount of loan to the applicant, agrees on the number of repayment periods, the amount of repayment in each installment, and charges interest. Although the banking industry attributed the relevant business to the credit card department in terms of business attributes, the criminal law should not only consider the business operation methods in the industry, but also pay more attention to its essence. [8] Although the credit card derivative loan business of each bank is different, it is essentially an independent personal loan contract between the cardholder and the bank.
5. Evaluate the illegality of defaulting on credit card derivative loans
The adjustment of the credit card business relationship between the card-issuing bank and the cardholder in the mainland is mainly based on the particularity of the status of the mainland's financial institutions, which is understandable, but the scope of application of the criminal law to such illegal acts should be strictly controlled, otherwise the criminal law may become a "debt collection law" for financial institutions, sharing the risk prevention and control tasks that should be undertaken by financial institutions. [9] The loan business is large in amount, has a long cycle, and the risk is higher than that of credit card overdraft, and the review standard is obviously stricter than the application conditions for credit cards, while the credit card derivative loan business is attached to the credit card business, called credit card overdraft, which is actually a business handled by the bank in violation of regulations in order to circumvent the approval procedures for the loan business or increase the credit limit of the cardholder in disguised form without the corresponding guarantee or qualification of the applicant, which is a disguised loan issued by the bank using a credit card, which does not comply with the relevant regulations of the CBRC.
On the one hand, in terms of quota, according to the 2009 Notice of the People's Bank of China, the China Banking Regulatory Commission, the Ministry of Public Security and the State Administration for Industry and Commerce on Strengthening Bank Card Security Management, Preventing and Combating Bank Card Crimes, the credit limit of credit card issuers for credit card credit lines and installment payments should be calculated together. Article 55 of the Measures for the Supervision and Administration of Credit Card Business of Commercial Banks issued by the China Banking Regulatory Commission (CBRC) in 2011 stipulates that "card-issuing banks shall not provide card services exceeding the credit limit for credit card transfers (transfers) and cash withdrawals." The total amount of credit card overdraft transfer (transfer-out) and cash withdrawal shall not exceed the credit card's cash withdrawal limit. "Issuing loans to cardholders in addition to the approved credit card limit actually breaks through the comprehensive credit line of the credit card, weakens the role of the credit limit in controlling risks, and increases the credit risk. On the other hand, in terms of review standards, except for some banks' credit card derivative loan business, which requires separate approval, most of them are no longer reviewed in accordance with the process and standards of credit business, which greatly lowers the loan threshold. However, the bank will transfer the risk caused by arbitrarily raising the limit and lowering the review standard to the cardholder and the judicial authority, and in the event of overdue, they will resort to public power to solve the problem, which not only increases the responsibility of the cardholder, but also makes unreasonable use of judicial resources, and the bank that fails to fulfill the audit obligation does not need to bear the adverse consequences, which is obviously unreasonable. [10]
From the perspective of the judicial authorities, the inclusion of such situations in the crime of credit card fraud to pursue criminal liability is to expand the understanding of the relevant judicial interpretations of malicious overdrafts, and to elevate ordinary loan disputes between banks and individuals to a criminal legal relationship, and to include them in the criminal law for accountability, which violates the modesty of the criminal law and does not conform to the principle of legality of crimes. Where a cardholder's default on such payment does not fall within the credit card overdraft of the crime of credit card fraud as provided for in Article 196 of the Criminal Law, and the relevant illegal conduct constitutes a crime, it shall be found to be the crime of loan fraud or the crime of fraudulently obtaining a loan in accordance with the relevant provisions of the Criminal Law;
In this case, the Caizhijin business launched by China Guangfa Bank is a typical credit card derivative loan business, which is a personal credit loan in the name of a credit card, which is an ordinary loan product rather than a credit card overdraft. Caizhi Amount is a cash loan separately approved by the bank beyond the fixed limit of the customer's credit card, and the loan is not credited to the cardholder's corresponding credit card, but to a one-time credit card of the cardholder; Cardholders must accept installments and repay the principal and corresponding handling fees on a monthly basis thereafter, with no interest-free period; although early repayment of unpaid installments can be exempted from the corresponding handling fees, they will instead charge liquidated damages, in short, unlike credit card purchases, which can be used interest-free for a certain period of time. From the perspective of the principle of legality and the effective crackdown on illegal and disguised lending in the banking industry, this case should be determined to be a civil lending relationship, and it is not appropriate to deal with it through criminal accountability.
[Notes]
[1] Luo Qiang, "Analysis of the Non-Crime of Credit Card Loan Business", China Prosecutor, March 2018 (II).
[2] Xu Mingxun and Li Peng, "On the Nature of Special Installment Loans in the Crime of Credit Card Fraud: An Observation from the Perspective of the Relationship between Criminal Law and Other Departmental Laws", Journal of Beijing Union University, No. 7, 2017.
[3] Luo Qiang, "Analysis of the Non-Crime of Credit Card Loan Business", China Prosecutor, March 2018 (II).
[4] Xu Zhihong, "Commercial Bank Credit Card Business", China Financial Press, 2007, p.3.
[5] Xu Mingxun and Li Peng, "On the Nature of Special Installment Loans in the Crime of Credit Card Fraud: An Observation from the Perspective of the Relationship between Criminal Law and Other Departmental Laws", Journal of Beijing Union University, No. 7, 2017.
[6] Xu Mingxun and Li Peng, "On the Nature of Special Installment Loans in the Crime of Credit Card Fraud: Observation from the Perspective of the Relationship between Criminal Law and Other Departmental Laws", Journal of Beijing Union University, No. 7, 2017.
[7] Luo Qiang, "Analysis of the Non-Crime of Credit Card Loan Business", China Prosecutor, March 2018 (II).
[8] Xu Mingxun and Li Peng, "On the Nature of Special Installment Loans in the Crime of Credit Card Fraud^ Observation from the Perspective of the Relationship between Criminal Law and Other Departmental Laws", Journal of Beijing Union University, No. 7, 2017.
[9] Luo Qiang, "Analysis of the Non-Crime of Credit Card Loan Business", China Prosecutor, March 2018 (II).
[10] Luo Qiang, "Analysis of the Non-Crime of Credit Card Loan Business", China Prosecutor, March 2018 (II).