"Repaying Existing Loans Required for Support" Small Business Voice Phishing Alert

[Asia Economy Reporter Kangwook Cho] Recently, a consumer alert has been issued due to cases of voice phishing where perpetrators contact victims by phone or text message, claiming that government-supported loans are available for small business owners affected by the novel coronavirus infection (COVID-19), and then demand money.

On the 8th, the Financial Supervisory Service (FSS) stated that there is concern over an increase in loan-pretending voice phishing scams exploiting the urgent financial pressure felt by the public, and urged special caution. As of the 6th, the number of voice phishing cases pretending to be government-supported loans related to COVID-19 has reached 10. The FSS also explained that reports and consultations regarding suspicious voice phishing text messages have surged.

The most common case, with 7 incidents, involved fraudsters embezzling funds under the pretext of repaying existing loans while promising financial support. The scammers deceived victims by saying that to receive low-interest government-supported loans, they must first repay loans they are currently using, and then embezzled the repayment funds.

According to the FSS, the voice phishing scammers introduced themselves as counselors from OO Savings Bank and approached victims saying, "Mr./Ms. OOO, low-interest government-supported loans are available for customers affected by the COVID-19 situation." The scammers told victims that existing loans at OO Savings Bank must be repaid first to receive interest benefits and the maximum loan limit, and victims were deceived into transferring 4.5 million KRW to the scammers.

There were 2 cases where scammers demanded fund transfers under the pretext of credit rating upgrades and loan processing fees. The scammers deceived victims by saying that because their credit scores were low, credit rating upgrade procedures were necessary to obtain loans, and embezzled funds under the guise of processing fees.

For example, a voice phishing scammer approached a victim claiming to be an employee in charge of small business loans at OO Bank, saying, "Due to COVID-19, we are providing government support loans for small business owners," and "Your current credit rating is low, but if you take out a 20 million KRW loan and repay it, your credit rating will improve, allowing you to get larger loans." The victim took out a loan from the financial company and transferred the loan amount to the scammer, suffering a total loss of 20 million KRW.

There was also one case where funds were embezzled after inducing the installation of a malicious application for non-face-to-face loan processing. The scammer approached the victim claiming non-face-to-face loans were possible, induced the installation of a malicious app, and then embezzled funds by obtaining personal information.

According to the FSS, the scammers first sent text messages to victims claiming low-interest loans were available, prompting victims to contact them. The scammers deceived victims by saying that due to COVID-19, loans could only be processed non-face-to-face, and induced victims to reissue their public authentication certificates and OTPs and install remote control apps. After the victim installed the remote control app, the scammer accessed OO Bank’s mobile banking and tricked the victim into providing OTP numbers, embezzling 47 million KRW.

The FSS emphasized that financial companies do not call unspecified individuals to encourage repayment of existing loans for government-supported loans, so such calls should be rejected outright. They also stated that there are no cases where fund transfers are requested under the pretext of processing fees or commissions. They advised that clicking on apps from unknown sources or suspicious internet addresses may lead to personal information leakage and should be rejected unconditionally.