[Voice112] ① 1.5 Billion Won Daily Damage... Tackling It with a 'One-Stop' Solution

Establishment of Integrated Reporting and Response Center for Telecommunications Financial Fraud
Declaration of the 'First Year to Eradicate Telephone Financial Fraud (Voice Phishing)'

The police flag of the Seoul Seodaemun-gu Police Agency is fluttering in the wind. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporters Seongpil Cho, Sehee Jang] The police have declared this year as the "Year of Eradication of Telephone Financial Fraud (Voice Phishing)" and are launching an all-out response. To this end, they are pushing forward with the establishment of an "Integrated Reporting and Response Center for Telecommunication Financial Fraud" by June, which will handle telecommunication financial fraud cases such as voice and messenger phishing in a 'one-stop' manner from reporting to action. This initiative aims to implement a comprehensive government-wide response to the continuously increasing voice phishing crimes. Based on the establishment of the center, the police plan to dedicate their organizational fate to eradicating voice phishing.

Emerged in 2006 and Evolved... Even Taking Lives

The term telecommunication financial fraud began to be used in our society starting in 2011 when the Act on the Refund of Telecommunications Fraud Damage was enacted. Before that, it was commonly referred to as voice phishing crime. This crime is said to have first appeared in 2006. The first victim case was reported to the police in June of that year. According to the police, 1,488 voice phishing crimes occurred that year, with damages amounting to 10.6 billion KRW.

Telecommunication financial fraud crimes have continuously evolved. As financial and communication means have advanced, the methods have become more intelligent and sophisticated. Crime types such as smishing, pharming, messenger phishing, and phishing sites have also diversified accordingly. The scale of damage has increased exponentially. According to the National Police Agency's tally until November last year, telecommunication financial fraud including voice phishing amounted to 20,479 cases, with damages totaling 514.7 billion KRW, comparable to the annual budget of a typical basic local government. This means damages of 1.5 billion KRW per day and 46.7 billion KRW per month.

A police official stated, "It has reached a situation where it is difficult to find someone around who has not been directly or indirectly affected by telecommunication financial fraud crimes such as voice phishing." This means it has become an everyday disaster that can happen to anyone. In fact, over the past three years, crime victims have been found across all age groups, from under 20 to over 70. The 50s age group had the highest average annual number of victims at 7,972, followed by the 40s with 5,385.

Among the victims, there are not a few cases of extreme choices due to despair over their personal circumstances. In April last year, a man in his 40s who ran a business in Busan committed suicide after being defrauded of 160 million KRW through voice phishing. In November 2021, a self-employed person in his 50s lost his entire savings of 9 million KRW to voice phishing and ended his life after police investigation.

Center Establishment... Crime Reporting and Response to Change

The police launched the establishment of the government-wide joint "Integrated Reporting and Response Center for Telecommunication Financial Fraud" last year to respond to crimes such as voice phishing, which have become part of our society. They are building a system that handles everything from reporting to action in a 'one-stop' manner. Based on the establishment of the integrated reporting and response center scheduled to launch in June this year, the police plan to declare this year as the "Year of All-Out Government Response to Telephone Financial Fraud."

Once the integrated reporting and response center is established, all reports will be centralized to the center, and personnel integrated from various ministries will handle them in a one-stop manner according to the type of complaint. Currently, when damage occurs, the police take measures such as account payment suspension, so there is no particular problem. However, in cases where damage has not yet occurred, general reports must be made to 112, reports and consultations on phone numbers used in crimes to the Korea Internet & Security Agency, and account payment suspension or damage relief to the Financial Supervisory Service, causing inconvenience.

The establishment of the center aims not only to alleviate the inconvenience of complainants but also to increase crime prevention effects by blocking all phone numbers or IDs related to reported fraud crimes and to utilize related information for investigations. The police have a blueprint to build an integrated platform by 2024 that automatically transmits reports to the relevant agencies to ensure appropriate action by each ministry. The collected report data will be used for crime prevention through analysis. For example, crime-use accounts and phone numbers will be databased and later used to block crime tools and track criminal organizations and investigate additional offenses.

The police expect that the center's establishment will have an effect not only on individual phishing cases but also on eradicating criminal organizations through investigations of additional offenses. Furthermore, they plan to relentlessly track voice phishing organizations involving organized crime groups, the distribution of proxy accounts and proxy phones, or money laundering organizations, blocking the use of victim funds as operating funds for criminal organizations. A National Police Agency official said, "By preparing countermeasures through rapid information sharing between ministries and immediately reflecting them in policies, smooth prevention of crime damage will become possible."