The Financial Supervisory Service (FSS) is tightening regulations on savings accounts that can be exploited for online fraud in used goods transactions.
On June 24, the FSS announced improvements to the savings account system at banks and small financial institutions to protect consumers from online transaction scams. This move comes in response to a rise in fraudulent activities where scammers exploit the ability to open multiple savings accounts quickly and remotely.
Currently, individuals can open only one demand deposit account across all financial institutions within 20 business days, but there are no limits on the number of savings accounts. This loophole has allowed fraudsters to post fake sales listings on online marketplaces, receive payments into multiple savings accounts, and then withdraw cash by prematurely closing those accounts.
In one case, a scammer opened 32 savings accounts within three days and defrauded 126 victims of approximately 1.2 billion won (about $1 million). Another fraudster created 13 accounts in two days, swindling 80 victims out of around 700 million won (about $530,000).
As a result, the FSS will now limit individuals to a maximum of three savings accounts per financial institution per quarter. This limit includes accounts that are closed early. Consumers wishing to open additional accounts will need to visit a branch in person.
The account cancellation process will also be strengthened. If a savings account is closed within three business days of opening, customers will be required to visit a branch to complete the cancellation instead of doing it online.
However, to minimize inconvenience for consumers, products with a monthly contribution limit of 1 million won or those that allow contributions only from the account holder's existing accounts will still be freely opened and closed as before. According to the FSS, 87.2% of savings accounts in the banking sector and 85.3% in the small financial sector fall under this category.
The FSS plans to enhance internal controls for anti-money laundering in banks and savings banks to ensure that customer verification and suspicious transaction reporting are strengthened if savings accounts are suspected of being misused for fraud.
Financial institutions are expected to implement these measures by the third quarter of this year after updating their operational procedures and systems.
* This article has been translated by AI.
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