In recent months, Japan has been hit by a new wave of crime: cash-card forgery. According to banks, cash withdrawals by forged cards have amounted to hundreds of millions of yen. At stake is the security of deposits. Action is urgently needed on two fronts: crime prevention and loss compensation.
Banks have demonstrated a willingness to take a variety of preventive steps, such as issuing chip-containing smart cards that are difficult to forge, but they appear reluctant to compensate cardholders for losses. As deposit managers, though, they ought to work out rules that minimize the liability of customers who have been victimized. If banks do not want to impose such rules on themselves, the Financial Services Agency (FSA) should consider establishing legally binding ones.
In September 2000, Keidanren, the Federation of Economic Organizations, presented an "interim proposal for improving transaction rules designed to meet advancements in information technology." The report, noting that fraud victims in the United States are obliged to pay a maximum of $50, said Japan should take its own action to cope with card crimes. Neither the FSA nor the banking community has responded positively.
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