'Accounts Opened and Loans Taken in the Name of Deceased Persons... 7,812 Financial Transactions in the Last 5 Years'

Conducted through Mobile and ATM Non-Face-to-Face Transactions
Financial Disorder Harms Both Financial Consumers and Banks
Strengthening Bank Post-Inspection and Improving Real-Name Verification Procedures for Non-Face-to-Face Transactions

#1 A was fined 3 million KRW for computer fraud and embezzlement charges after transferring 7.05 million KRW from the deceased mother's bank account to his own account via mobile banking and ATM, and for not giving the gold necklace jointly inherited by himself and his younger brother B to brother B. (Daegu District Court, January 15, 2024)

#2 One week ago, C was sentenced to 4 months in prison with a 1-year probation for computer fraud after obtaining a 30 million KRW non-face-to-face loan using the smartphone of his deceased older brother D. (Seoul Eastern District Court, December 1, 2022)

The Financial Supervisory Service (FSS) stated that financial transactions under the names of deceased customers continue to occur mainly through non-face-to-face channels, urging bereaved families to be cautious to prevent the leakage and misuse of the deceased’s ID cards and mobile phones, and to report the death to administrative and financial institutions. The financial authorities plan to strengthen banks’ post-transaction inspections and improve real-name verification procedures for non-face-to-face transactions to block financial transactions under deceased persons’ names.

According to the FSS on the 4th, an investigation into financial transactions under deceased persons’ names at all banks revealed that from August 2018 to July 2023, there were 1,065 account openings, 49 loan executions, and 6,698 post-report transactions (such as account or certificate password changes) at 17 domestic banks, totaling 7,812 transactions.

Most of these transactions occurred between the date of the customer’s death and the date the bank recognized the death (death registration date) through non-face-to-face channels such as mobile banking and ATMs. Kim Si-il, Director of the FSS, explained, "The main reason for financial transactions under deceased persons’ names is that family members or acquaintances sometimes use the deceased’s name without proper delegation procedures, and the current non-face-to-face real-name verification process at banks makes it difficult to perfectly verify the identity of the account holder."

Financial transactions under deceased persons’ names disrupt financial order and can cause losses to both financial consumers and banks. In particular, if third parties such as family or acquaintances withdraw deposits, take out loans, or use opened accounts for financial fraud without proper delegation procedures, they may face penalties or other disadvantages under relevant laws.

Director Kim added, "From the bank’s perspective, if negligence in real-name verification during account opening is recognized, the bank may be subject to sanctions for violating the Real Name Financial Transactions Act, or disputes may arise with other heirs after deposit withdrawals or loan executions. If heirs refuse to assume debt on loans under the deceased’s name, defaults may occur."

The financial authorities plan to continue institutional efforts to block financial transactions under deceased persons’ names, such as introducing facial recognition systems during non-face-to-face account openings. The Financial Services Commission previously announced a ‘Financial Sector Voice Phishing Response Plan’ and promoted the introduction of facial recognition systems for non-face-to-face account openings. In March, they plan to implement a revised ‘Detailed Application Plan for Non-Face-to-Face Real-Name Verification’ that includes recommendations for real-name verification through facial recognition systems.

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