Rapid Increase in Fraud Sites with Overseas Servers... 31 Sites in 3 Years, 13 Detected This Year

Significant Price Drops or Redirecting to Other Shopping Malls May Indicate Fraud... Consumer Caution Advised

[Asia Economy Reporter Lim Cheol-young] The Seoul Metropolitan Government has recently warned consumers to be especially cautious as damages from fraudulent online shopping malls, which evade tracking or blocking by hosting servers overseas, have surged.

According to Seoul City on the 22nd, amid the rapid increase in damages caused by scam sites with overseas servers, 42% of the 31 sites detected over the past three years, totaling 13 sites, were reported between January and May of this year. Moreover, most of the reported overseas server scam sites deal with high-priced products such as smartphones and home appliances, resulting in significant damages. The amount lost over the past five months reached 132 million KRW, more than five times the combined total of 11.8 million KRW in 2020 and 8.34 million KRW in 2021.

When scams using domestic servers are detected, the Seoul Electronic Commerce Center quickly proceeds with shutdown measures through server hosting companies to prevent further consumer damage. However, it is explained that blocking scam sites with overseas servers is difficult, which can lead to increased consumer harm. In particular, scam sites currently operating with overseas servers describe products in Korean and operate customer centers with domestic phone numbers starting with ‘010’ or via KakaoTalk, and display stolen business registration numbers and business addresses at the bottom of the site, making it very difficult for ordinary consumers to distinguish them.

The methods are also evolving. Previously, scammers posted products cheaply on open markets and then lured consumers to scam sites with additional discounts to induce direct transactions. Recently, however, there has been an increase in cases where sales posts are made on SNS or peer-to-peer trading platforms, directing users to access overseas scam sites.

Meanwhile, over the past 10 years, a total of 154 scam sites have been reported to the Seoul Electronic Commerce Center, with total damages amounting to 3.42874 billion KRW. The center immediately disclosed information about scam sites and, with the cooperation of domestic hosting companies, has completed shutdowns of 102 sites with servers in Korea, but shutdowns of 52 sites with overseas servers have been impossible.

Lee Byung-wook, Director of Fair Economy at Seoul City, stated, “In the case of scam sites operated through overseas servers, there is no legal basis for blocking them, making it difficult to immediately shut down or block access to prevent consumer damage.” He added, “Currently, cooperation from telecommunications companies providing internet services domestically is essential to prevent such scam damages. We are working on improving legal systems and establishing cooperative frameworks with telecom companies.”