The House of Councilors on Wednesday passed into law a bill to protect depositors from losses from cash card thefts and forgeries.
The law, which cleared the House of Representatives last week, requires financial institutions to fully compensate depositors for losses from stolen or forged cash cards unless they can prove the depositors are responsible for such losses.
The law was proposed after a sharp rise in cash card thefts and forgeries last year damaged confidence in the Japanese banking system.
The National Police Agency said 3,448 cash card theft and forgery cases last year caused losses of about 2.4 billion yen.
Similar depositor-protection laws have been established in other industrial countries, including the United States and France.
Under the Japanese depositor-protection law expected to take effect in February, financial institutions would not be held responsible for losses from cash card thefts and forgeries if they can prove the depositor was seriously at fault.
A resolution attached to the law says serious faults include telling others their personal identification number, writing the number on their cash cards, and letting other people easily use their cards.
Compensation would be limited to 75 percent if it can be proved that a depositor bore minor responsibility for the loss.
Depositors may be deemed as having minor responsibility if they allow cash cards to be stolen together with documents specifying their PIN numbers.
But lawmakers who proposed the law said financial institutions may have to fully cover losses in most cases because it may be difficult for them to prove that depositors were at fault.
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