Top Credit Card Firm Raided by China Police Over Gambling Allegations

The largest credit card bill management provider in China has been the subject of a police raid, according to local media. Approximately 100 police swarmed into the 51 Credit Card Inc offices, located in Hangzhou.

The fintech firm that’s listed in Hong Kong claims to be the top credit card bill management service in China with in excess of 83 million users on its books.

Online gambling links 

China law enforcement officials have so far been tight-lipped about the raid and haven’t released any information about the reason. However a statement from 51 Credit Card Inc claimed that the police visit was due to allegations about their debt collection processes being outsourced. Some media outlets were speculating it was connected to improper use of customer data.

However, one investigative publication was able to shed more light on the matter, claiming that the large-scale raid was due to illegal gambling activity. In China, gambling is not permitted on the mainland other than the state-run lotteries. According to sources, 51 Credit Card Inc was processing payments unlawfully for international online gambling operators.

China has launched a number of stings in recent months in its clampdown over illegal gambling outfits. While it still remains unconfirmed, some experts are suggesting the scale of the police operation would be more in keeping with the allegations circulating over betting activity than customer data breaches.

Stock exchange value plunge 

News of the raid sent the share price of 51 Credit Card Inc plunging on the stock exchange, wiping a third of the value before trading was suspended at the request of the company. It only launched on the HKSE in July 2018 and had been a favourite with investors.

Earlier in 2019, China’s central bank warned its financial institutions that there was a need for better protocols to be implemented, to guard against hidden payments to forbidden sites such as gambling, cryptocurrency or pornography. These “new emerging crimes” have been in the spotlight in the Asia-Pacific region and China has been at the front of the pack urging others to take a tough stance. Many of the nations in the area have been working together to target online gambling sites.