Increase in Fraud Attempts Amid COVID-19 Spread
Ensure Strict Email Security Management
Verify Payment Account Change Requests by Phone
[Asia Economy Reporter Lee Gwan-joo] #. Company A, which manufactures medical supplies, recently received an email from a company in the Philippines requesting a transaction. The email included the order amount along with a statement that the air freight cost would be prepaid. The company sent a deposit slip for the prepayment and requested urgent delivery by air, asking for the freight cost to be paid on their behalf. Company A, believing the freight cost was included in the prepayment, transferred $2,800 without suspicion. However, the export payment and air freight charges that the local company claimed to have sent never arrived. Upon investigation, it was revealed to be a trade fraud involving the theft of the company and employee names.
Email trade frauds that deceive domestic companies seeking overseas expansion continue to occur frequently. Fortunately, if recognized in advance, damages can be prevented, but cases leading to actual losses still exist, requiring companies to exercise special caution.
According to the National Police Agency on the 20th, there were a total of 1,183 email trade fraud cases over four years from 2017 to last year. By year, the cases surged from 187 in 2017 to 367 in 2018, then 305 in 2019, and 324 last year, maintaining a trend of over 300 cases annually. Since it is uncommon for the same company to be victimized multiple times by email trade fraud, it is reasonable to assume that around 300 domestic companies suffer damages each year.
The types of email trade fraud have also become more diverse. They involve email hacking, impersonation of local company accounts, creation of fake websites, or using liquidated corporations for criminal activities. Especially amid the expansion of non-face-to-face contracts due to the COVID-19 pandemic, email trade fraud is expected to increase further. The fact that email trade fraud cases decreased in 2019 but increased last year when COVID-19 spread supports this.
To prevent email trade fraud, it is advisable to use company PCs with security programs installed when communicating with overseas companies and to change passwords regularly. Emails from unknown sources should not be opened and should be deleted. To prevent hacking, it is safer to use authentication methods such as mobile phone verification or one-time passwords (OTP) in addition to IDs and passwords.
It is also important to carefully examine the email accounts used by overseas buyers. First, verify whether they use company emails and check if the accounts are legitimate. Securing various certificates to confirm the trustworthiness of overseas buyers is also crucial. Familiarizing oneself with major trade fraud cases and countermeasures by country before transactions can significantly reduce the risk of damage.
A police official emphasized, "When receiving requests to change payment accounts via email, always verify the facts through phone calls or faxes, and specify the account number to be paid in advance when drafting contracts." They added, "Seeking assistance from related organizations such as the Korea International Trade Association and KOTRA is also a good way to prevent fraud."
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