Caixin Weekly | New Regulations on Telecom Fraud: Restrictions on SIM Card Registration and Bank Account Transactions Implemented (AI Translation)

财新周刊｜办电话卡、银行开户交易都受限 电诈联合惩戒新规落地

In recent times, Luo Ye from Sichuan has been entangled in issues stemming from "renting out" his bank card, a move that led to all his bank accounts being frozen. After serving a ten-day detention for his involvement, he faced challenges with daily banking activities and could not receive his salary. A new regulation, effective from December 1, aims to standardize penalties for telecommunications fraud, involving a two or three-year disciplinary period with clear procedures for notification and appeal. [para. 1]

The "Disciplinary Measures" aim to uniformly combat telecom fraud by establishing consequences for related illegal activities. Luo Ye, tempted by a fraudulent job offer, handed over his bank card for money transactions, which were traced back to criminal activities. The frozen bank card left him grappling with restricted banking operations. Although he sought to resolve the issue by obtaining a police certificate, it remained a significant burden on his daily life. [para. 3][para. 7]

In Sichuan province, regulations have been in place since 2021 to deter illegal banking activities. These regulations impose bans on opening new accounts and restrict access to non-counter services for five years. Luo Ye realized the extent of disciplinary measures only after consulting with police officers, which left him struggling to appeal the decision and facing financial restrictions. [para. 8]

The “Disciplinary Measures” introduce tiered disciplinary actions where individuals involved in cyber fraud face different levels of financial, telecom, and credit-related penalties. For individuals who, like Luo Ye, face milder charges, measures are in place for a two-year disciplinary period, including restrictions on financial account operations and the inclusion in the financial credit database. [para. 16]

Authorities have been implementing measures to prevent fraud by targeting the misuse of bank cards, payment accounts, and phone lines. Despite real-name registration being mandatory, some individuals find ways to circumvent these measures. The "Disciplinary Measures" reinforce the provisions of the Anti-Telecom Network Fraud Law, aiming to punish and deter fraudulent activities effectively. [para. 22][para. 23]

These measures highlight the evolution of regulations against telecom fraud, ensuring they are backed by the law instead of being arbitrary. Past initiatives like the "Great Persuasion to Return" campaign illustrate attempts to encourage voluntary return of those involved in fraud, though some measures stirred controversies of “collective punishment,” affecting family members of offenders. [para. 26][para. 28]

Legal bodies reinforce that punishment should not extend beyond the individual offender, aligning with modern law principles. Therefore, the new "Disciplinary Measures" attempt to clearly define the scope, procedure, and relief methods for penalties, marking progress in safeguarding citizens' rights under legal frameworks. [para. 39][para. 41]

Focus has shifted to ensuring basic financial and communication services remain accessible to penalized individuals. The "Disciplinary Measures," slated to take effect in December 2024, also provide avenues for appeal, offering hopes for reduced penalty periods for individuals like Luo Ye. In response to systemic telecom fraud, China has enacted stricter laws and measures to thwart the industries sustaining these crimes. Their success now hinges on effectively balancing punitive actions with the rights and needs of individuals, ultimately steering society towards heightened fraud prevention awareness. [para. 54][para. 55]