Taiwan Banks Step Up Monitoring of Credit Card Overpayments to Close Fraud Loophole

Credit card overpayments are balances created when cardholders pay more than the amount due. Fraud rings, however, can exploit them by transferring funds into credit card accounts and then moving the money through refunds or purchases, circumventing monitoring of conventional deposit accounts. Land Bank of Taiwan, Hua Nan Bank and First Bank have therefore made overpayments a focus of fraud prevention efforts to stop credit cards from becoming conduits for illicit funds.

Several banks, including Land Bank of Taiwan, Hua Nan Bank and First Bank, have recently strengthened their monitoring of unusual transactions. They are applying system controls or manual verification to high-risk transaction categories to reduce the risk of illicit fund transfers. Available information does not disclose when the measures took effect, the monitoring thresholds or the amounts involved. Each bank’s actual controls remain subject to its own announcements.