Financial Supervisory Service and Banking Sector Join Forces to Eradicate Loan Fraud Spam Messages

From the 15th, blocking sender numbers when spam texts are detected

Notification provided on whether the message is officially sent by the bank

Expected reduction in loan scam text damages and relief from spam text inconveniences

[Asia Economy Reporter Jo Gang-wook] Starting from the 15th, if the sender number of loan scam and illegal loan advertisement spam texts is confirmed as spam, the corresponding phone number will be blocked. This measure is a joint effort by financial authorities and banks to eradicate the recent surge in loan scam and illegal loan advertisement spam texts impersonating financial institutions.

The Financial Supervisory Service (FSS) announced on the 14th that it held a business agreement ceremony with the Korea Internet & Security Agency (KISA), the Korea Federation of Banks, the National Agricultural Cooperative Federation and National Federation of Fisheries Cooperatives, 15 banks, and WhoWho & Company to jointly cooperate and respond to loan scam and illegal loan advertisement spam texts impersonating banks.

According to KISA, the number of reported and detected loan spam texts has rapidly increased from 310,000 in the second half of 2017 to 450,000 in the first half of 2018, 590,000 in the second half of 2018, and 750,000 in the first half of last year. Consequently, not only the potential damage to financial consumers from loan scam texts but also the inconvenience to mobile phone users caused by spam texts is on the rise.

Under this agreement, starting from the 15th, if the sender number of loan scam and illegal loan advertisement spam texts is confirmed as spam by comparing it with the bank’s official phone numbers, the corresponding phone number will be blocked. When users report spam texts using the built-in 'Spam Easy Report Function' on their mobile phones, the reported spam texts are accumulated in the KISA system.

Additionally, notifications about whether a message is officially sent by a bank will be provided through the 'WhoWho app.' For bank-related spam texts that have not yet been reported or blocked, users can check via the WhoWho app whether the incoming message is officially sent by the bank.

The FSS tested this system with four banks and expects that at least 5 to up to 50 spam sender numbers can be blocked daily. It also estimates an average monthly blocking effect of 3 million spam texts.

Through this, the FSS expects a significant reduction in damages caused by loan scam texts and a substantial relief from inconveniences caused by spam texts, thereby strengthening the protection level for financial consumers. Banks will also see reduced unnecessary complaints and reputational risks caused by impersonation and scam texts, while IT and security companies are expected to benefit from improved and expanded functions of their programs (apps).

The FSS plans to expand this system to the entire financial sector, including savings banks and capital companies, after its successful implementation in the banking sector. It will also actively respond to increasingly sophisticated financial crimes by integrating AI algorithms. Furthermore, in connection with the 'Comprehensive Voice Phishing Prevention Measures' promoted with related ministries since December last year, more multifaceted and effective measures against voice phishing and loan scam texts will be pursued.

At the agreement ceremony, Yoon Seok-heon, Governor of the FSS, emphasized, "This 'Loan Scam Text Prevention System' is a desirable example of regtech utilization for financial consumers," and added, "We will continue to strengthen the cooperative system among institutions to eradicate illegal financial activities."

This content was produced with the assistance of AI translation services.