New rule to better regulate city's prepaid cards

Shanghai’s lawmakers on Friday approved a draft rule to better regulate the city’s prepaid cards.

The rule, which will take effect from January 1 of 2019, stipulates that prepaid-card issuers have to register on a government-run platform, and update their information on a regular basis to allow consumers to evaluate the risk of buying their prepaid cards, according to the standing committee of the Shanghai People’s Congress.

Companies that don’t register properly will be fined between 2,000 yuan (US$294) and 50,000 yuan.

When there is "huge risk" involved for consumers, companies should deposit a certain amount of money into a special account to ensure financial safety. Violators will be fined between 20,000 and 200,000 after receiving warnings from the authority.

Cases involving failure to fulfill services promised in the contract of prepaid cards will be settled by the public security bureau.

The rule was passed amid a surge of complaints over prepaid cards in recent years.

In 2017, the city received 12,106 complaints related to prepaid cards, an increase of 25.9 percent from a year earlier. They involved 3,887 companies, of which 1,864 reported their bosses shut down stores, leaving consumers unable to get their prepaid money back.