As cases pile up of group-name accounts that look like personal names being exploited for jeonse fraud and voice phishing, the Financial Supervisory Service issued a consumer alert. It said people could suffer losses if they transfer money after checking only the account holder's name.
On the 28th, the Financial Supervisory Service (FSS) issued a consumer alert titled "Beware of acrostic group accounts impersonating personal names" and urged caution regarding arbitrary group accounts named after individuals.
The problem involves the so-called "acrostic group account." For example, a group name such as "Gathering of residents widening roads in Honeun-dong" is shortened to three characters, "Hong Gil-dong," and used to open a group-name account. On the surface, it is virtually indistinguishable from a personal-name account.
Under the current Real-Name Financial Transactions Act, financial companies must open accounts in the actual name (the name of the person who actually uses it). Individuals can open accounts using the name on their resident registration card, while arbitrary groups such as alumni associations or social clubs can open accounts under the group name on their corporate registration certificate. The issue is that more people are abusing this system to create group accounts that look identical to personal names.
It was in fact used for jeonse fraud. According to the Financial Supervisory Service (FSS), a licensed real estate agent created an arbitrary group named after the lessor and siphoned off about 800 million won in jeonse deposits from tenants into the account under that group's name. It was found that tenants transferred the funds without much suspicion because the account holder's name matched the lessor's name on the contract.
As a countermeasure, the Financial Supervisory Service (FSS) decided to guide changes to how account names are displayed. Going forward, for group accounts that look like personal names, the notation "(group)" will be displayed next to the account name. For example, an account previously shown as "Hong Gil-dong" will be labeled "Hong Gil-dong (group)." Banks will begin implementing this in June, with savings banks and other smaller financial institutions following in stages.
The Financial Supervisory Service (FSS) said, "If the counterparty is an individual but the notation '(group)' appears next to the account name, exercise particular caution with the transaction."