Caixin
Aug 28, 2021 05:47 AM

PBOC Puts Financial Fraud Label on Promoting Guaranteed Principal and High Returns

China has 260 million people age 60 or older, accounting for 18.7% of the population.
China has 260 million people age 60 or older, accounting for 18.7% of the population.

China’s central bank put a financial fraud label on promotion of financial products with guaranteed principal and high returns and vowed to strengthen financial literacy among the elderly.

Older people have a hard time adapting to financial digitization and are more dependent on traditional channels to meet their financial needs, Liu Guiping, deputy governor of People’s Bank of China (PBOC), said Friday at a media briefing to kick off financial literacy month in September.

The bank regulator has a list of prohibited practices, said Guo Wuping, director of the Consumer Protection Bureau of the China Banking and Insurance Regulatory Commission. Banks and insurers can’t force the elderly to use only bank cards because many older people still prefer deposit books, and they shouldn’t try to force the elderly to conduct banking through self-service smart devices, Guo said.

The financial sector should fully realize that China’s population is aging and should support the development of a senior economy and retirement finance, Liu said.

This year’s focus for financial literacy month is the senior population. China has 260 million people age 60 or older, accounting for 18.7% of the population, according to the census. Many elderly people have accumulated considerable savings. Criminals often try to take advantage of elderly’s demand for retirement products and empty their savings through financial fraud. Meanwhile, with changes in family structure, there is a huge gap between supply and demand for senior nursing services.

In 2020, there were 106,100 civil and criminal cases involving the elderly’s financial property rights and interests, court data shows.

The central bank also reminded consumers that bitcoin and other cryptocurrencies are not legal tender and have no real value. At the media briefing, Yin Youping, deputy director of the Financial Consumer Rights Protection Bureau of the PBOC, said the central bank will maintain a high-pressure campaign and continue to crack down on digital currency-related transactions. Yin urged people to stay away from crypto investments and report criminal activities.

Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bobsimison@caixin.com)

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