[Crime Insight] "Bricks Instead of Goods..." The 'Cyber Scam' Spreading Like Poisonous Mushrooms

Domestic Cybercrimes Account for 3 out of 4 Cases
COVID-19 Non-Face-to-Face Expansion... Crime Methods Evolve
Diversification Beyond Goods Fraud

'1.6 million cases.' This is the approximate number of crimes that occur annually in South Korea. The types of crimes are diverse, including violent crimes, intellectual crimes, traffic crimes, and cybercrimes, and their methods are evolving rapidly. In a reality where anyone can become a victim, having awareness of crime and knowing prevention measures can minimize damage. In , we analyze major domestic crime trends based on the latest cases and cover prevention, response methods, and policy changes. This week's topic is the 'cyber fraud' that occurs all too frequently around us.

[Asia Economy Reporter Lee Gwan-ju] "I sent the money, but they didn't send the goods." "I ordered a used item online, but instead of the item I wanted, there was a brick inside." These are the complaints of victims of internet goods fraud.

There are countless types of cybercrimes such as hacking, cyber defamation, and illegal cyber gambling, but the most frequent incidents are 'cyber fraud.' According to the National Police Agency, among the 234,098 cybercrime cases that occurred domestically last year, a whopping 174,328 cases (74.5%) were cyber fraud. This means that about 3 out of 4 cases are cyber fraud, showing how deeply it has penetrated our daily lives.

Increase in Cyber Fraud Alongside the Spread of COVID-19

Experts agree that a decisive factor in the explosive increase of cyber fraud crimes is 'COVID-19.' With non-face-to-face interactions becoming routine and the recession caused by COVID-19, the increase in 'non-face-to-face used transactions' driven by the desire to buy cheaper goods has had a significant impact. Additionally, various fraud methods exploiting COVID-19 issues have emerged.

A representative example is the 'mask sales fraud.' Although it has largely disappeared now as mask supply stabilized, during the early stages of the COVID-19 crisis last year, when mask rationing systems were implemented due to shortages, false listings flooded internet used goods sites. In fact, from February 28 to March 5 last year, the police uncovered 93 cases of mask sales fraud in just one week.

Their methods were mostly similar. They posted messages on social networking services (SNS) claiming to sell masks, took the money, but did not deliver the goods. Among those arrested, there was a case where over 100 million KRW was swindled from four victims. Notably, individuals who had continuously committed goods transaction fraud switched to mask sales fraud after the outbreak of COVID-19.

There were also malicious cases of selling defective masks as if they were legitimate products. One mask seller was caught selling 55,000 defective masks (worth about 68 million KRW) that had been ordered for recall and disposal by the Ministry of Food and Drug Safety on internet shopping malls.

Cyber Fraud Becoming More Intelligent and Organized with Overseas Bases

Cyber fraud methods are evolving. Not only do they occur under the guise of personal transactions, but some groups have established offices overseas and divided roles to commit crimes in an organized and sophisticated manner.

A representative case is the fraud organization led by the mastermind A, who was forcibly repatriated from the Philippines to South Korea last December. The 33 members of the organization thoroughly divided roles such as hawala remittance and money laundering, recruiting and managing bank accounts, and providing accounts for crimes.

The fraud they committed was goods transaction fraud. From December 2016 to March last year, they contacted victims directly or posted false listings online to deceive victims into thinking they were selling goods, took the money, but did not deliver the items. The amount they swindled totaled a staggering 13.4 billion KRW. Especially, as mask demand increased due to COVID-19, from January to March last year, they deceived 32 people by pretending to sell KF94 masks and embezzled 1.55 billion KRW.

The mastermind A, who embezzled 13.4 billion KRW through internet goods fraud based in the Philippines, was escorted into the country through Incheon Airport last December.
[Photo by National Police Agency]

Beyond simple goods fraud, fraud types are becoming more sophisticated. The so-called 'stock leading rooms,' which lure inexperienced investors with promises of high returns by targeting interest in stock investment, are also thriving. According to police cases, there is an organization that set up an office in Vietnam, created fake ELS investment sites and investment consulting disguise sites, and swindled 3.85 billion KRW from 472 people.

They purchased a personal information database worth about 100 million KRW, then sent mass text messages guaranteeing high returns such as '300 investment 500 profit,' and used messengers like KakaoTalk to deceive people into investing in high-yield financial products linked to stock indices, thereby embezzling money. Since such fraudulent investment messages are still being widely sent, special caution is required. There is also a case where three suspects were arrested for operating a fake stock trading mobile app and swindling about 3.5 billion KRW from around 400 people under the pretext of guaranteeing high returns.

'Know to Prevent' How to Avoid Cyber Fraud

To prevent fraud that can occur in internet used transactions, the first step is to use the National Police Agency's 'CyberCop' app. This allows you to check whether the seller's phone number or account number has any history of fraud reports. It can also be checked on the Cyber Investigation Bureau website of the National Police Agency. If there is a history of fraud reports, naturally, you should not engage in transactions to avoid damage. Request 'certification photos' to confirm that the other party actually has the goods, and rather than using parcel delivery, it is better to meet in person to check the condition of the goods and make payment.

National Police Agency Cybercop App.

Using an escrow service can further reduce damage. However, since scammers sometimes send links to fake escrow sites, special caution is needed. First, verify that the website's internet address (URL) is correct. If it has been altered, it is highly likely to be a scam. Among major escrow sites, platforms like Uniqlo and InniP2P require both seller and buyer to be members to transact, so if payment is processed as a non-member, suspicion is warranted. Also, the account holder name of virtual accounts provided by escrow sites does not include personal names, and since buyers can choose the deposit bank in the bank transfer window, any instruction to deposit only to a designated bank is clearly fake.

Do not let your guard down just because it is a shopping mall. Beware of 'bait products' sold at excessively low prices, and check the seller's history and customer reviews. When purchasing from overseas, verify the reliability through various channels. You can check on the Korea Consumer Agency website or websites that assess foreign site trustworthiness (such as ScamAdvisor).

Online, you can easily find various tempting phrases like super discounts, guaranteed high returns, and lowest prices. While not all are scams, at this very moment, someone somewhere might be falling victim to cyber fraud. To prevent fraud damage, there is one phrase we must always remember: "There is no such thing as a free lunch."