South Korea’s financial authorities along with government departments are working on eliminating new electronic financial fraud based on messengers and illegal financial sites.
They are going to strengthen their solutions towards new voice-phishing starting from next year and establish data-based system against current voice-phishing.
Financial Services Commission (FSC) announced ‘Electronic Telecommunication Financial Fraud (Voice-Phishing) Prevention Measures’ on the 18th. On this day, it held a meeting with relevant departments such as Ministry of Science and ICT, Ministry of Foreign Affairs, Ministry of Justice, Korea Communications Commission, National Police Agency, and Financial Supervisory Service.
Messenger-based voice-phishing has emerged as main agenda. Amount of damage from messenger-based voice-phishing between January and October of this year was $12.7 million (14.4 billion KRW) which is 273% increase ($3.45 million (3.9 billion KRW)) compared to the same duration from last year. This type of voice-phishing usually uses name and a profile picture of an acquaintance and request a person to wire-transfer amount less than $2,655 (3 million KRW) to an account of a stranger while giving an emergency issue as the reason for wire-transfer.
Relevant departments are putting up warning signs whenever messages from people who are not registered as friends are received to respond to this new type of financial fraud. Korea Communications Commission is planning to introduce a new technology that will block illegal financial sites.
FSC applied voice-phishing application detection method to voice-phishing system operated by Financial Security Institute.
FSC is enforcing authentication procedure whenever accounts are opened through internet-only banks and it is temporarily banning accounts that are used for crimes related to voice-phishing.
Voice-phishing that abuses phones or texts is also prevented through AI-based applications. FSC is going to establish data-based system to prevent financial frauds and it is pushing for revision of Credit Information Act by the end of the first half of 2019 for data-based system.
FSC is also enforcing post-sanctions and precautions against fake deposit bankbooks. It is going to make authentication procedure for opening of accounts through internet-only banks very elaborate. Information of holders of fraudulent accounts that are frequently reported will be shared within financial industries. Punishment for receiving fake deposit bankbooks through indirect measures will be changed from imprisonment of 3 years or less to imprisonment of 5 years of less. Acts of recommending or mediating rental or trade of fake deposit bankbooks and lending accounts and sending money to voice-phishing groups can be penalized as well.
To modify damage relief procedure, Ministry of Justice submitted a revised proposal that regulates profits made from illegal voice-phishing as ‘property damage’ so that wealth from frauds can be confiscated and returned back to victims.
FSC is going to prepare grounds for not starting bond extinguishment procedure if amount of social cost from bond extinguishment procedure and return procedure is lower than amount of benefits. A case when balance of a fraudulent account is less than $0.89 (1,000 KRW) corresponds is one example. If victims apply for property damage refund separately, such refund can be returned back to them after they go through bond extinguishment procedure.
Staff Reporter Ham, Jihyun | goham@etnews.com