"Fraud Crimes Devouring the Common Economy... Police Launch First In-Depth Analysis"

31% Surge in 2 Years, Methods Becoming More Sophisticated
Commissioned Research on Cause Analysis and Countermeasures

[Asia Economy Reporter Lee Gwan-ju] As 'fraud crimes' that undermine the common people's economy run rampant, the police have launched a research project to conduct in-depth crime analysis and develop countermeasures. This is the first time the police have focused specifically on analyzing fraud crimes intensively.

According to the National Police Agency and the Public Procurement Service's Nara Marketplace on the 22nd, the police recently commissioned a research project titled "Analysis of the Causes of the Increase in Fraud Crimes and Police Countermeasures." The National Police Agency explained the background, stating, "Fraud crimes are serious offenses that destroy individuals' lives and hinder economic growth to the extent that they can be likened to 'economic murder.' With technological advancements, new transaction patterns and novel methods are emerging."

Looking at the major crime trends in Korea, only fraud crimes are showing a sharp increase. The number of fraud crime cases rose from 231,489 in 2017 to 304,472 last year, an increase of 31.5% over two years. This contrasts with traffic crimes, which decreased by 24.7%, and violent crimes, which decreased by 2.9% during the same period. Conversely, the police's fraud crime clearance rate has been declining, from 79.5% in 2017 to 74.6% in 2018, and 73.8% last year. This indicates that fraud methods are becoming more intelligent and sophisticated.

The main stage for fraud is also shifting from offline to online. In fact, the police arrested 10,888 cyber fraud cases in July alone this year. Most were typical frauds where fake products were posted online, money was received, but no goods were delivered; however, sophisticated new types of cyber fraud are also emerging. In Jeju, seven people were arrested for setting up a fake equity-linked securities (ELS) investment and consulting website, promising "guaranteed high returns," and embezzling 3.8 billion KRW in investment funds. Especially with the spread of the novel coronavirus disease (COVID-19) this year, the use of non-face-to-face services such as online shopping has increased, and related fraud activities are expected to rise. Numerous cases have also occurred where some gyms and travel agencies recruit customers and then conduct 'planned closures,' resulting in consumer damages.

Through this research project, the police plan to conduct an in-depth analysis of the current status of fraud crimes in Korea and analyze the causes of increases by fraud crime type. They will also identify police countermeasures to prevent damage and legislative matters that need to be addressed. The research project is expected to be completed within the year. The National Police Agency stated, "We plan to use this to prepare comprehensive measures against fraud crimes and implement them step-by-step and by sector."