Rising Urgent Cash Demand... Credit Card Companies on Alert to Prevent Voice Phishing

'Delayed Deposit' Applied to Cash Services Despite No Recommendation
AI-Powered Voice Phishing Detection... Authorities Also Release Fraudster's Voice

As demand for quick cash increases amid high interest rates and inflation, credit card companies are focusing on preventing voice phishing. They have even applied delayed deposit systems to cash advances, despite it not being a regulatory recommendation. With the Financial Supervisory Service actively involved, efforts to prevent voice phishing are spreading.

According to the industry on the 26th, Hyundai Card will apply the 'delayed deposit' system to cash advances starting today. Even if a customer applies for a long-term card loan (card loan), the deposit will be made two hours later.

Hyundai Card decided to extend this system beyond card loans to cash advances. If there is no cash advance usage history within the past year and the amount is 3 million KRW or more, the deposit will be delayed by two hours unconditionally. This is due to concerns that as voice phishing crimes become more sophisticated, cases of misuse of cash advances?which generally involve smaller amounts than card loans?will increase. Previously, the Financial Supervisory Service recommended applying the delayed deposit system to card loans from 2012, judging that credit card companies' card loans were being exploited for voice phishing crimes.

Hana Card has also recently decided to apply the delayed deposit system to cash advances. Samsung Card, KB Kookmin Card, and Woori Card are applying Fraud Detection Systems (FDS) to cash advances. Instead of blanket delayed deposits, they block withdrawals when suspicious transactions are detected, contact the customer for verification, and then proceed with the deposit. In particular, Samsung Card established the industry's first AI machine learning-based voice phishing dedicated FDS system in 2020. It detects potentially criminal transactions in real time and promptly guides customers on necessary actions.

The authorities have also recently intensified efforts to prevent voice phishing. On the 10th, they publicly released the voices of 12 fraudsters whose voices were reported more than five times during the first half of this year. Along with this, they shared major fraud methods and exemplary response cases and engaged in various promotional activities. This is due to concerns that damages will increase as demand for quick cash rises amid high interest rates and inflation.

Especially among the elderly, who are vulnerable to scams, card loans and revolving credit (partial carryover agreements) are on the rise. According to data submitted by the Financial Supervisory Service to Rep. Song Seok-jun of the People Power Party, the card loan balance for those aged 60 and over increased by about 2.52 trillion KRW from the end of 2019, after the COVID-19 pandemic, to the first half of this year. The number of users also increased by 170,000. This contrasts with all age groups, where card loan balances and users decreased due to the burden of high interest rates.

Revolving credit, which is sought by those with tight finances, is also increasing. Revolving credit is a service that allows partial payment of credit card bills and defers the remaining balance to the next month without delinquency records. According to the Korea Federation of Credit Card Associations, as of the end of last month, the revolving credit carryover balance of eight full-service card companies (Shinhan, Samsung, KB Kookmin, Hyundai, Lotte, Hana, Woori, and BC Card) was 7.5024 trillion KRW. This increased by 124.2 billion KRW from the previous month, marking a record high. A credit card industry official explained, "The more difficult the financial situation, the more people seek quick cash, increasing the risk of exposure to voice phishing. With both inflation and interest rates soaring, the entire card industry has recently been paying more attention."

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