The government will legislate to require financial companies to compensate for some or all of the losses from voice phishing. Regulatory frameworks will also be established to allow virtual asset exchanges to suspend accounts used for criminal activities and refund victims.
On the 28th, the government announced a comprehensive plan to eradicate voice phishing at the Government Seoul Office.
Since January 1 of last year, financial authorities have been implementing a voluntary compensation system where financial companies share responsibility in the event of non-face-to-face financial accidents such as voice phishing. The government's plan is to strengthen financial companies' compensation obligations by enacting this system into law.
Kim Tae-hoon, an official from the Financial Policy Bureau, noted during a back briefing, "It's difficult to effectively prevent damage with just the attention and efforts of individual citizens, and this is a measure based on the recognition that financial companies with advanced expertise and infrastructure, such as Fraud Detection Systems (FDS), need to respond responsibly and systematically."
Financial authorities plan to refer to examples from countries like the United Kingdom and Singapore that recognize financial companies' strict liability for voice phishing and aim to legislate the 'Telecommunication Fraud Compensation Act' within this year. The United Kingdom requires the sending and receiving banks to compensate on a 50-50 basis, while Singapore divides the primary responsibility for compensation to financial companies and the secondary responsibility to telecommunication companies.
Kim stated, "We are currently in the stage of gathering opinions from the banking sector," and added, "Since discussions with various industries outside of banking are necessary, we will proceed with care and take time." This is interpreted as an indication that they will take their time considering the significant backlash that financial companies might have. If financial companies are to compensate the several billion won in voice phishing damages on an annual basis, the burden is expected to be considerable.
Financial authorities have also decided to require financial companies to mandatorily enhance their capabilities to respond to voice phishing. The establishment of dedicated departments and the assignment of specialized personnel will be mandated by law, and the Financial Supervisory Service will evaluate compliance and request improvements if necessary.
In addition, virtual asset exchanges will introduce legal grounds to suspend accounts involved in criminal activities and enable the refunding of victims' funds, similar to traditional financial companies. A 'Safe Block Service' will also be swiftly established to prevent the transfer of funds from voice phishing victims through the misuse of open banking.