Voice Phishing Damage from Easy Remittance Abuse to Be Blocked Faster... Enforcement Decree Amendment Passed

Enforcement Decree of the Act on Refund of Telecommunications Fraud Damage
Approved by the Cabinet Meeting

Measures have been established to quickly block voice phishing (telecommunication financial fraud) damage that exploits easy remittance. Account payment suspension for voice phishing damage amounts can be promptly implemented, and financial companies are required to build and operate voice phishing detection functions.

The Financial Services Commission and the Financial Supervisory Service announced that the amendment to the enforcement decree regulating the details of the "Special Act on the Prevention of Telecommunication Financial Fraud Damage and Refund of Damage" was approved at the Cabinet meeting on the 19th.

The "Telecommunication Fraud Damage Refund Act," passed in February this year, established a prompt damage relief procedure in response to voice phishing such as account threats exploiting the payment suspension system or easy remittance services, and mandated financial companies to verify the purpose of financial transactions when customers open accounts. The amended enforcement decree stipulates detailed procedures and methods delegated by the law, such as information sharing related to fraud-use accounts between financial companies and prepaid service providers.

First, specific methods for sharing information regarding fraud-use accounts between financial companies and prepaid service providers were stipulated. When a financial company confirms that the damaged funds have been transferred to a prepaid service provider, it requests confirmation of the transfer details from the prepaid service provider, who then verifies the final fraud-use account to which the funds were transferred and notifies the financial company that transferred the funds.

Evidence documents and submission methods necessary to verify the customer's purpose of financial transactions were also specified. Financial companies may request submission of evidence documents via written documents, fax, email, or other electronic methods. If the submitted evidence is insufficient to verify the purpose of the financial transaction, the account may be opened as a limited account. If the customer refuses to provide information or if the transaction purpose is related to voice phishing, the account opening may be refused or existing accounts may be terminated.

Financial companies are also required to establish regular self-inspection procedures. They must build and operate computer systems for detecting voice phishing, and when temporary measures (delays or temporary suspension of transfers, remittances, or withdrawals) and identity verification actions are taken on user accounts, the related action records must be preserved for five years.

The amended Telecommunication Fraud Damage Refund Act and its enforcement decree will take effect from the 28th. The financial authorities stated, "To ensure the smooth implementation of the amended laws, we will continuously communicate with financial companies, prepaid service providers, and other industry players, and cooperate with investigative agencies such as the police to actively respond to voice phishing, which is evolving in an organized and sophisticated manner."