"Banks Do Not Send Loan Solicitation Texts"… Smishing Alert

Surge in Large Loans and Government Loan Smishing
Clever Evolution Amid the COVID-19 Situation

[Asia Economy Reporter Kiho Sung] "You are eligible to apply for the special guaranteed loan under the June agreement between our bank and the government for special financial support. The guarantee support under this agreement is valid until the 18th of this month. If you have not yet applied, please check the guarantee details and limits and apply as soon as possible."

Government support and low-interest refinancing loan text message financial scams (smishing) are rampant. Small business owners urgently needing funds due to the extension of social distancing measures are the main targets.

According to the Ministry of Science and ICT and the Financial Supervisory Service on the 15th, the number of smishing text detections last year was about 950,000, a 2.6-fold increase from 360,000 the previous year. As the COVID-19 situation prolongs, the trend is increasing further this year. According to WhoWho & Company, which provides the spam blocking application (app) 'WhoWho,' among 6.8 million spam reports in the first quarter of this year, smishing accounted for about 140,000 cases, a 40% surge compared to the same period last year.

Recently, refinancing or government loan impersonation types have increased. They induce phone consultations by claiming that you can switch to low-interest loans handled by commercial banks on behalf of the government. When consumers call, they pretend to introduce loan products but then recommend installing phishing apps or extract personal or credit information to open accounts for crimes or use in high-level financial fraud.

Smishing lures consumers with exceptional loan conditions. They claim to offer a maximum guarantee limit of 200 million KRW with a fixed annual interest rate as low as 2%. The loan period is up to 60 months, with no collateral required, and the repayment method is equal principal and interest payments with no early repayment fees. Recently, they even include a 'Compliance Officer Pre-Review Approved' number. Banks have stated, "Except for loan interest payment notifications and loan extension notices, all others can be considered scams," and "Banks do not advertise loans via text messages."

An official from the Financial Supervisory Service advised, "Do not call the number from which you received the text message; instead, contact the bank’s main number to verify." They added, "Especially if you clicked on the internet address sent in the message, an app that intercepts all calls may be installed, so if you clicked the link, verify using another phone."

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