Illegal Credit Card Sales Promotions: the related concerns and need for a strict regulation


There are lots of illegal sales promotion activities going on by credit card companies. We can easily find out that credit card companies are offering free gifts or exemption of annual fees. Influenced by those illegal promotion activities, many individuals cannot make rational choices when choosing their credit cards. It then leads to abuse and overuse of credit cards, contributing to increases in the size of household debt along with some social side effects. To solve these kinds of problems, the financial authorities are trying to establish an effective supervisory system to monitor and regulate the illegal promotion activities by credit card companies.

Intensive control over illegal sales activities

Before tightening the credit card issuance policies, the financial authorities set some pre-measures to limit the overheated competitions in the credit card market. Credit card companies will no longer be allowed to issue a credit card to an individual whose credit rating is 7 or below. This regulation is to be effective as of sometime in this October or November. Also, the number of supervising staff is increased to more frequently and thoroughly inspect the illegal sales promotion activities.

Establishment of a self-regulating system within credit card companies

Credit card companies must establish a self-regulating system to internally supervise and manage their own sales activities. They should make the model criteria a corporate law to further strengthen a sense of responsibility for their own sales activities. Details of the self-regulating system are as follows. The supervisory system should monitor whether a credit card applicant is given any kind of gifts regarded as an illegal sales. A staff member, having done an illegal sales activity, is to be penalized for it. A supervisory division, apart from sales division, will be established to regularly check up the credit card promotion on-sites.

For more effective and intensive supervisory system, ‘rewarding for reporting system’ is to be implemented by FSS, the Credit Finance Association and creditcard companies. Also, it is planned that a task force, composed of those entities, is formed to come up with more concrete countermeasures against illegal credit card sales promotion activities.


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