Interpretation of the Regulations of Beijing Municipality on the Administration of Single-use Prepaid Cards
The Regulations of Beijing Municipality on the Administration of Single-use Prepaid Cards was adopted at the 35th meeting of the Standing Committee of the 15th Beijing Municipal People’s Congress on November 26th, 2021, and will come into force on June 1st, 2022.
First, the background and drafting process of the regulations
In recent years, single-use prepaid cards have been widely used in people’s daily life, involving education and training, beauty salons, commercial retail, accommodation and catering, sports and fitness, culture and entertainment, etc., which has played a certain role in facilitating payment, promoting consumption and prospering the market. At the same time, with the increasing number of card issuance, violations of consumers’ legitimate rights and interests occur frequently, which has become the focus of social attention.
According to statistics, in 2020, there were 170,000 complaints about the consumption of single-use prepaid cards in the city, including 120,000 in the field of education and training (77,000 in vocational skills training and 27,000 in extracurricular tutoring), and the number of complaints was 10 times that of 2019; There are 50,000 sports, fitness, beauty salons and other industries, and the number of complaints is six times that of 2019. Consumer complaints mainly reflect problems such as no threshold for card issuers, no supervision of funds received in advance, and no guarantee of service quality. It is necessary to respond to social concerns through legislation, establish and improve the management system of single-use prepaid cards, standardize market order and prevent social risks.
On July 27th, 2021, the 123rd executive meeting of the municipal government deliberated and passed the bill. In July and September, the Standing Committee of the Municipal People’s Congress deliberated the bill twice. During this period, a series of investigations and opinions were carried out, and the NPC Law Committee was consulted on legal issues related to legislation. On this basis, the bill was revised and improved, and the bill was passed by the Standing Committee of the Municipal People’s Congress on November 26, 2021.
Second, the legislative thinking and scope of application of the regulations
Under the premise of implementing the Law of People’s Republic of China (PRC) on the Protection of Consumers’ Rights and Interests and fully protecting consumers’ rights and interests, the regulations regulate the related behaviors of operators in issuing and paying single-use prepaid cards, and solve the outstanding problems such as the security of prepaid funds, the overlord clauses of contracts, the difficulty in refunding and the difficulty in providing evidence. Taking into account the relationship between government supervision and business environment, consumer protection and independent operation of enterprises, in order to achieve a win-win situation between safeguarding consumers’ legitimate rights and interests and stimulating market vitality.
The regulations clarify the applicable regulations on the issuance, redemption, supervision and management of single-use prepaid cards within the administrative area of this Municipality. Single-use prepaid card refers to the entity voucher or virtual voucher issued by the operator to consumers in the form of pre-receipt of funds, for consumers to pay goods or services in installments only within the scope of the operator and its cooperation. Entity vouchers include magnetic stripe cards, chip cards, paper coupons and other carriers; Virtual credentials include passwords, serial codes, graphics, biometric information and other agreed information.
III. What provisions have been made in the Regulations in clarifying the responsibilities of government supervision?
The regulations clarify that prepaid card management adheres to the principles of standardized development, industry supervision, social co-governance and risk prevention. The municipal and district people’s governments shall strengthen the leadership of prepaid cards, establish and improve the coordination mechanism of long-term management, and clarify the supervision and management responsibilities of relevant departments. The municipal market supervision and management department is responsible for the overall planning, organization and coordination of the implementation of these regulations, and the competent departments of education, civil affairs, transportation, commerce, culture and tourism, market supervision and management, sports and other industries are responsible for the supervision and management of their respective industries. Prepaid cards with unclear industry authorities shall be supervised and managed by the relevant departments designated by the Municipal People’s Government. Industry departments and urban management law enforcement agencies with law enforcement power shall carry out law enforcement work in accordance with the division of law enforcement determined by the Municipal People’s Government.
4. What provisions have been made in the Regulations in establishing and improving the mechanism of social co-governance?
The regulations stipulate that prepaid card transactions follow the principles of equality, voluntariness, fairness and good faith. Consumers and business operators should consider the credit risk and legal risk of prepaid cards and make rational transactions. Industry authorities and other relevant departments should strengthen publicity, use policy interpretation, case analysis and risk analysis to publicize matters needing attention to consumers and operators, prompt the risks of prepaid card redemption, and provide support for consumers’ rights protection. Industry associations and chambers of commerce should strengthen self-discipline management, guide members to issue prepaid cards in accordance with the law and compliance, remind the prepaid card redemption risks in a targeted manner, and help resolve prepaid card consumption disputes. Consumers’ associations should guide consumers to establish a scientific and rational concept of consumption, mediate disputes over prepaid card consumption according to law, and conduct social supervision over acts that harm consumers’ legitimate rights and interests.
V. How do the regulations regulate the issuance and payment of single-use prepaid cards and safeguard the legitimate rights and interests of consumers?
In view of disputes and complaints in practice, the regulations stipulate the obligations that operators should perform. Operators shall introduce relevant information about the purchase and use of prepaid cards to consumers truthfully, comprehensively and accurately. Operators are listed as untrustworthy enforcers, listed in the business exception list, and apply for cancellation, etc., and may not issue prepaid cards. The business operator shall issue a certificate with specified contents or sign a written contract to the consumer. The municipal industry department shall, jointly with the municipal market supervision and management department, formulate a model text of prepaid card contract. The business operator shall give a risk warning to the contents that have a great interest to consumers, such as setting the expiration date. Format clauses, store notices, etc. shall not be unfair or unreasonable to consumers, and the contents made shall be invalid. Operators should provide inquiries for consumers to understand the use of prepaid cards, and should inform consumers in time if they cannot pay them. Operators and e-commerce platforms shall keep transaction records for at least three years.
6. What measures do the regulations have to protect consumers from returning their cards reasonably?
In order to solve the problem of "difficulty in returning the card" reflected by consumers, the regulations stipulate that consumers who have not spent within seven days of purchasing the card have the right to ask the operator to return the card, and the operator shall give a full refund at one time. If the business operator fails to provide goods or services as agreed, and the balance is not enough to meet the single minimum consumption, the balance shall be returned within the agreed time limit. If there is no agreement or the agreement is unclear, it shall be returned within 15 days from the date when the consumer requests a refund.
7. What are the institutional arrangements for the regulations to ensure the safety of prepaid funds?
The regulations stipulate that operators who issue cards in excess of a certain amount and amount shall put on record, and the specific scale and requirements shall be determined by the competent department of industry. The Municipal Market Supervision Bureau has established a prepaid card service system to facilitate operators’ filing and consumer inquiries.
Establish a depository system for prepaid card advance funds, and the operators who are included in the depository management shall open a special depository account for prepaid card advance funds at the depository bank, deposit the advance funds that meet the prescribed requirements into the special depository account and withdraw them in accordance with the prescribed methods. The specific measures shall be formulated by the municipal industry department in conjunction with the local financial supervision department. The local financial supervision bureau of the city shall build an information platform for deposit and management of funds received in advance, and collect the information on deposit and management of funds submitted by depository banks. Operators who should be put on record and kept in custody according to the regulations shall complete the record or kept in custody within 90 days from the date of implementation of the regulations.
Eight, what legal responsibilities should operators bear for harming the legitimate rights and interests of consumers?
Operators who harm the legitimate rights and interests of consumers shall bear civil liability in addition to violating the administrative order, and shall also bear administrative liability. The types of administrative penalties stipulated in the regulations involve fines, orders to suspend or stop issuing cards, and orders to suspend business. For the most serious acts of unqualified card issuance and failure to keep custody according to regulations, a fine of more than 20,000 yuan and less than 100,000 yuan shall be imposed; If the circumstances are serious, it shall be ordered to suspend business. For acts such as not issuing credentials and not saving records, a fine of more than 2,000 yuan and less than 10,000 yuan may be imposed. Deliberately delaying or unreasonably refusing to return the advance payment, a fine of more than 10,000 yuan and less than 50,000 yuan may be imposed. Failing to put on record as required, a fine of not less than 1,000 yuan but not more than 5,000 yuan shall be imposed. At the same time, it makes guiding provisions on credit supervision measures.