Regulation Increase on Pre-Paid Cards

The pre-paid money card industry in China has flourished in recent years, especially in major cities such as Shanghai and Beijing. They are more convenient than cash and can hold anywhere from 100 to 200,000 yuan. With the exponential increase in the number of companies registered to distribute such cards, there has been a similar increase in the number of complaints especially in regard to their date of expiration.

Often, money left on the cards is absorbed by the companies after they expire. For example, it is estimated that 100 million yuan is left over on expired cards in Shanghai alone. Many people have voiced their opinion that pre-paid cards are an investment and their money should be at zero risk, especially if the company they purchased their card from goes bankrupt or their cards expire.

In lieu of this, the government is looking at ways to protect consumer rights and develop common standards. This relatively new industry experiences little to no supervision, so the PBOC is encouraging customers to purchase their cards from reputable institutions such as China UnionPay while it begins to launch a series of supervisory regulations to oversee the operation of pre-paid card companies.

Lehman, Lee, and Xu attorney Scott Garner of the Shanghai office, stated ˇ°We at Lehman, Lee, and Xu are very conscious of consumer protection in China, and will monitor all developments regarding the increased supervision of the pre-paid card industry both in Beijing and Shanghai.ˇ± For updates, please visit http://www.lehmanlaw.com/press-room.html



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