People’s Bank of China: Collaborate with Public Security for Precise Evaluation of Account-Related Fraud Risks, Avoid “One-Size-Fits-All” Measures

Financial Punishments Play a Role in Combating Telecommunications and Network Fraud Crimes. On November 26, the Ministry of Public Security jointly reported with multiple departments on the relevant situation of the “Joint Punishment Measures for Telecommunications and Network Fraud and Its Related Offenses.”
When responding to financial punishment measures, relevant personnel from the People’s Bank of China stated that during the governance of the “financial chain” in telecommunications and network fraud, the People’s Bank of China attaches great importance to precise governance of the “financial chain” and cooperates with public security organs to accurately assess the risk of accounts involved in fraud, without adopting a “one-size-fits-all” approach to risk prevention measures.
The Paper noted that Articles 5 to 8 of the “Punishment Measures” stipulate specific measures for financial, telecommunications network, and credit punishments, clarifying the conditions for applying credit punishments and inclusion in the basic database of financial credit information, and refining the relevant punishment measures stipulated in Article 31 of the “Anti-Telecommunications and Network Fraud Law.”
For example, the “Punishment Measures” stipulate that individuals held criminally liable for committing telecommunications and network fraud and its related crimes are subject to financial, telecommunications network, and credit punishments, with a punishment period of 3 years; Units, individuals, or relevant organizers identified by municipal public security organs or above as engaging in illegal buying, selling, leasing, or lending of SIM cards, IoT cards, fixed-line telephones, telecommunication lines, SMS ports, bank accounts, payment accounts, digital RMB wallets, internet accounts, etc., are subject to financial and telecommunications network punishments, as well as inclusion in the basic database of financial credit information, with a punishment period of 2 years. It is clearly stated that different types of punishments are imposed on different punishment subjects, reflecting appropriate punishment.
Meanwhile, while comprehensively applying punishment measures such as financial, telecommunications network, and credit punishments, the “Punishment Measures” retain basic financial and communication services for the punished individuals to ensure their basic living needs are met, fully reflecting the appropriateness of the punishments.
Yang Qing, Deputy Director of the Payment and Clearing Department of the People’s Bank of China, stated that imposing financial-related punishments on units and individuals involved in telecommunications and network fraud is one of the important measures of joint punishment. The “Punishment Measures” stipulate that commercial banks and payment institutions shall implement the following measures against punished individuals identified by public security organs: first, restricting the non-counter withdrawal function of bank accounts and digital RMB wallets under the names of punished individuals; second, suspending payment account services under the names of punished individuals; and third, temporarily suspending the opening of new payment accounts and real-name digital RMB wallets for punished individuals. Additionally, relevant information on punished individuals will be included in the basic database of financial credit information.
To fully reflect the appropriateness of the punishments, while imposing punishments on punished individuals, the “Punishment Measures” also ensure their basic living needs. During the punishment period, punished individuals are allowed to normally handle existing basic living expenses such as tax withholding and payment, social security, water, electricity, gas, and other fees, and are allowed to open new bank accounts with limited functions to avoid excessive impact of punishment measures on the individuals and protect their basic rights and interests.
Yang Qing reminded the broad masses of the people to enhance their awareness of prevention, not to sell, lease, or lend their bank accounts, payment accounts, and digital RMB wallets to others, not to provide their own payment codes to others for receiving or transferring funds of unknown origin, and not to provide others with online banking U-shields, dynamic verification codes, or other real-name verification assistance, effectively preventing being exploited by offenders to carry out telecommunications and network fraud activities.
When responding to how commercial banks and payment institutions can coordinate risk prevention and control with service optimization during the governance of the “financial chain” in telecommunications and network fraud, Yang Qing stated that the People’s Bank of China attaches great importance to precise governance of the “financial chain” and guides commercial banks and payment institutions to coordinate the prevention and control of fraud-related risks with service optimization. First, cooperate with public security organs to accurately assess the risk of accounts involved in fraud, without adopting a “one-size-fits-all” approach to risk prevention measures. Second, improve the risk prevention system, guide commercial banks and payment institutions to strictly fulfill their obligation to inform the implementation of risk prevention measures, and improve the assessment and dynamic optimization adjustment mechanism. Third, strengthen technical prevention, guide commercial banks and payment institutions to apply technical means such as big data analysis to continuously improve the scientificity, accuracy, and effectiveness of risk prevention measures. Fourth, ensure smooth channels for public appeals and remedies, guide commercial banks and payment institutions to promptly accept and handle public dissent appeals, provide explanations and guidance, and continuously improve the level of payment services.
Yang Qing stated that the People’s Bank of China will continue to guide commercial banks and payment institutions to coordinate convenience, benefit to the people, and risk prevention and control in accordance with the principles of overall planning, coordination, legality, and standardization, promote precise governance of the fraud-related “financial chain,” and effectively protect the safety of people’s funds and legitimate rights and interests.