Building up a profile of a fraudster

Some of you may remember the sci-fi movie Minority Report, starring Tom Cruise as a police officer in the year 2054 who apprehends criminals based on foreknowledge provided by psychics - that is, he arrests potential criminals before they have committed a crime. This may be wishful thinking. Or is it?

According to the 2010 Association of Certified Fraud Examiners report on occupational fraud and abuse, a typical organisation loses 5 per cent of its annual revenue to fraud, with a median loss of US$160,000.

Risk management plays a crucial role in the consumer finance business.

In China, both personal and business credit information is kept in the government's credit bureau, under the People's Bank of China. The service has been live since 2006; an individual's personal and debt information is uploaded and updated regularly by financial institutions.

At the end of last year, eight billion personal records were already registered, with more than one billion credit histories. Since 2011, the bank has issued new rules to open up its database service to financial institutions other than banks, such as microcredit and guarantee companies.

Many people are unaware that, according to Chinese law, failure to make credit card payments is a serious crime. "Delinquent payment", as it is known, is considered a "malicious overdraft", which is subject to a maximum jail term of 10 years and a fine of 500,000 yuan (HK$613,000). Hence, people should think twice before committing such crimes.