The Financial Supervisory Service (FSS) is enhancing its online fraud prevention and response system for electronic payment service providers (PG companies) in light of the unauthorized payment incidents involving ChatGPT. Following the activation of a joint response hotline with credit card companies, the FSS is now expanding its collaborative efforts to include PG companies that facilitate online transactions.
On July 15, the FSS and the Korea Fintech Industry Association announced the establishment of an 'Online Fraud Response Committee' involving major PG companies, the Financial Security Institute, and experts from academia and security fields.
The formation of this committee is a follow-up to a report by this outlet on June 24, which highlighted a series of suspected unauthorized payment cases related to ChatGPT. In response, the FSS decided to activate a joint hotline with the Korea Credit Finance Association and credit card companies.
At that time, the FSS aimed to consolidate complaints, approval records, and status of damage recovery related to unauthorized payments across different card companies to determine if the same fraudulent methods were spreading throughout the industry. The dispute resolution departments and fraud detection system (FDS) teams of the card companies were instructed to quickly share similar cases with the Korea Credit Finance Association and the FSS.
Now, the response scope has been broadened to include PG companies. The FSS identified a structural vulnerability where transactions flagged by financial companies' FDS were not being blocked by PG companies, leading to actual fraudulent payments. It noted that individual responses from card companies and PG companies made it difficult to detect recurring patterns of suspicious transactions across various payment channels.
The committee includes major PG companies such as Naver Financial, Kakao Pay, Viva Republica, Danggeun Pay, Hectopay, and Kukon. The committee plans to divide into FDS and anti-money laundering (AML) subcommittees to share experiences and response cases related to suspicious transactions and establish common response standards for the industry.
The FSS and the Fintech Industry Association aim to analyze the current status and issues of fraud response based on industry cases by October, drafting a preliminary version of the 'Standard Practical Guidelines for Fraud Prevention and Response.' After gathering feedback, the final guidelines are expected to be confirmed in November, followed by a seminar to announce the results.
* This article has been translated by AI.
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