Japan: credit card smugglers from Asia


Staff member

After latest arrest of 8, worries Japan now target of fake credit card smugglers

Eight Malaysian nationals have been arrested by Chiba Prefectural Police on suspicion of importing fake credit cards into Japan hidden in a toy turtle and other items, investigative sources have revealed.

The arrests are the latest in a string of similar cases across the country, all coming amid Japan's ongoing comprehensive shift to IC chip cards or IC-compatible payment platforms ahead of the 2020 Tokyo Games to prevent fraud. The switch, however, may in fact have spotlighted Japan as a target for credit card scams.

The eight Malaysians arrested from September through October entered Japan through Narita Airport carrying a total of 63 fake credit cards inside a turtle plush toy and a travel pillow. The cards were discovered by an officer from the Tokyo Customs Narita Branch.

Of the suspects, 29-year-old Tan Yong Jie allegedly used a fake card to acquire a 102,600 yen wristwatch in Fukuoka Prefecture, and was issued a fresh arrested warrant on Oct. 18 on separate fraud and other allegations. Tan was with a man who was arrested at Narita Airport, but she managed to escape investigators and enter the country. Tan reportedly then purchased the watch, plus brand-name bags and perfumes. She is said to have admitted to the allegations.

While no foreign nationals were arrested for smuggling fake credit cards into Japan in 2016, there have already been 18 people arrested this year, including two other Malaysians at Kansai International Airport in June. The police believe that the counterfeit cards and the purchase of brand-name items may be linked to an international criminal organization and are investigating the backgrounds of the eight most recent suspects.

According to sources close to the investigation, there are internet and other advertisements claiming that people who participate in fake credit card smuggling can sightsee in Japan. There are also reportedly instructions in Malay suggesting schemes like, "We will erase your debt, so go to Japan and bring back products!"

According to the Ministry of Economy, Trade and Industry and the Japan Consumer Credit Association, it is relatively easy to commit credit card fraud in Japan compared to in the United States and Europe. There are two types of credit cards -- those with electromagnetic strips only and those with IC chips, the latter extremely difficult to counterfeit or use fraudulently.

However, just 17 percent of domestic credit card transactions between December 2016 and February 2017 involved a chipped card -- versus 99 percent in Europe and 47 percent in the U.S. It is believed that credit card companies insuring merchants against money lost through fraud led to the slow adoption of IC payment platforms.

The ministry and credit card companies are aiming for 100 percent of card transactions to be IC-based by the 2020 Games. A Japan Consumer Credit Association representative explained, "There is a possibility that Japan will be inundated with people using fake credit cards." With the steady increase in inbound tourism, one source close to the investigation warned that cases of smugglers pretending to be tourists bringing in fake cards and using them to shop may also rise.


Staff member

Malaysian 'tourists' snapping up goods in Japan with fake credit cards

August 26, 2017 (Mainichi Japan)

Japan has seen a recent spate of fraud incidents in which people from Malaysia posing as tourists illegally purchase luxury items with fake credit cards.

It is thought that the combination of Japan's welcoming approach to tourists and its relatively slow crackdown on forgery have made it a target for certain Chinese-related crime organizations. It seems that criminals are increasingly entering the country pretending to be tourists, purchasing items in airports with fake credit cards, and then hastily returning home to avoid being caught.

In June, a 20-year-old Malaysian woman of Chinese descent and a 19-year-old male were arrested at Kansai International Airport on suspicion of bringing fake credit cards into Japan, according to a source close to the investigation. It is understood that the two suspects were given a stuffed toy outside Kuala Lumpur International Airport by a male accomplice, inside which there were 16 fake credit cards that had the two travelers' names written on them.

The pair deliberately chose to go to Japan via South Korea, in order to avoid the stringent baggage checks that are in place for people flying directly into Japan from Malaysia. Upon landing in Japan, the two suspects stayed inside the airport and set about purchasing luxury Gucci watches and Louis Vuitton bags in a duty free shopping area, with the intention of taking them back to Malaysia.

Apparently, they were only supposed to stay in the country for 25 hours, according to the plan that had been laid down by the crime group in their native country. Commenting on episodes such as these, a source close to the investigation explains, "These 'hit and run' style cases, in which suspects escape from the country after quick illegal purchases are becoming more common."

Since 2016, police have arrested approximately 70 Malaysian men and women on suspicion of bringing over and using fake credit cards in Japan. The total financial damage has risen to 73 million yen (about $670,000). It is understood that the relevant crime groups have switched their bases from China to Malaysia, in order to evade police investigations within China.

"Japan! Tour and accommodation free." This was one of the adverts that a crime group posted online in order to entice people into taking fake credit cards to Japan. Desperate, vulnerable debt-ridden youngsters responded to the advert, entering an arrangement under which they received a roughly 10 percent cut of the money paid by the crime group for the illegally purchased goods.

In another case, locations linked to a 48-year-old Chinese man were searched by Osaka Prefectural Police in March on suspicion of storage of illegally purchased products. In total, 31 items such as wallets and bags valued at about 7.2 million yen in total were seized from the locations. It transpired that the goods had been bought by a 25-year-old male painter who was arrested for attempting to bring in 30 fake credit cards at Kansai International Airport, during a previous two-day visit to Japan.

There have also been cases of people coming to Japan frequently during a short period. One arrested male-female pair had apparently been instructed to "use up to five cards per shop, spend 2 million yen each time, and go up to the limit of each card."

Overall, it seems that crime groups are exploiting the fact that Japan is experiencing an increase in inbound tourism. It means that they can organize large-scale illegal "shopping sprees," while pretending to be tourists here on short-stay visits, remaining relatively inconspicuous among the crowds.

Another reason for focusing on Japan surfaced in a Chinese message that was found on a confiscated smartphone of a person believed to belong to one of the crime gangs: "In Japan, cards without IC chips can still be used. So we should quickly make money (before the system changes)."

According to the Ministry of Economy, Trade and Industry and the Japan Credit Card Association, credit card information can be saved either on a magnetic or an IC chip. Payments using IC chip credit cards, which are harder to use illicitly, started to become widespread in the 1990s, and the percentage of IC chip payments in Europe has risen to 99 percent (between December 2016 and February 2017). In the U.S., the figure climbed to 47 percent during the same period, having previously been about 10 percent. However, in Japan, IC chip payments accounted for just 17 percent of the total during this period -- the lowest rate among developed countries.

One of the reasons for this trend in Japan is thought to be stores' reluctance to cover the cost of IC chip terminals. In addition, credit card companies issue cards that have both the IC chip and electromagnetic strip incorporated into one card, in order to maximize the number of stores where the card can be used. Also, if an old style credit card is used illegally, the credit card company pays out compensation, which also explains the hesitation to switch to IC chip cards.

Under the Installment Sales Act that was amended in 2016, stores are required to switch to IC chip terminals. However, there are no punishments if stores decide not to make the change.

As a senior investigator in this field points out, "It is essential that stores change their way of thinking. They need to open their eyes to the fact that illegal purchasers are targeting Japan under the cover of the inbound tourism boom."