‘Complete Damage Recovery’ Almost Impossible... Victims Cry Twice [Voice Phishing Expos?]

Refund Rate Increased but Still Below Half
Cryptocurrency and Others Make Remittance Easier
Environment Makes Arrests More Difficult

[Asia Economy Reporters Kwanju Lee, Byungdon Yoo] The greatest pain for victims of voice phishing is the difficulty of rapid damage recovery. Even if the ringleader is caught, complete damage restoration is practically impossible, and the time and cost consumed in trials are considerable, which exacerbates the damage.

According to the Financial Supervisory Service, the refund rate for voice phishing victims (the ratio of recovered amounts to reported damage amounts) remained at 24.6% in 2017, 22.8% in 2018, and 28.5% in 2019. This means that damage recovery is difficult even after falling victim to voice phishing. Last year, the refund rate rose to 48.5%, with 114.1 billion KRW refunded out of 235.3 billion KRW in damages, but it still remains at about half.

It would be fortunate if the damage amount could be preserved immediately through account suspension upon damage detection, but many cases, such as loan fraud-type voice phishing, are often recognized only days later after contact with related parties is lost. Meanwhile, the voice phishing intermediary completes money laundering and transfers the damage amount to the organization, making recovery impossible before the ringleader is caught. Even if the ringleader is apprehended, it is safe to say that the full damage amount rarely remains intact.

There are also cases where perpetrators propose settlements with small amounts to reduce punishment. Hwang Mo (38), a self-employed person who lost 20 million KRW to voice phishing, said, "The lawyer of the caught cash collector proposed a 'deal' to settle criminally for 5 million KRW and to recover the rest through civil proceedings." He added, "The proposed amount is much less than the damage, and I am angry that the perpetrator’s punishment is reduced, but I am conflicted about whether to settle to recover even a little damage." So far, Hwang has only recovered 700,000 KRW.

Experts predict that damage recovery will become even more difficult in the future. Professor Jongin Lim of Korea University Graduate School of Information Security diagnosed, “In the past, voice phishing organizations had many delivery accidents through various routes for currency exchange, but now it has become too simple, such as exchanging to virtual currency and sending it.” He added, “It is not easy to catch them, remittance is easy, and traces do not appear, creating a very favorable environment for voice phishing organizations.”