FSS launches task force with payment firms to combat online fraud

The Financial Supervisory Service has formed a task force with the Korea Fintech Industry Association and other partners to block fraudulent online payments, as a surge in such incidents has prompted calls for payment gateway companies to tighten security.

The online fraud payment response task force launched Wednesday with the goal of building a prevention and response framework to strengthen industry security and protect consumers, the FSS said.

The task force brings together the Fintech Industry Association, major payment gateway companies, academics and security experts, and will operate through two working groups — one focused on fraud detection systems (FDS) and another on anti-money laundering (AML). The body plans to assess vulnerabilities based on sector-specific incident cases through October, then issue standard operational guidelines for preventing and responding to fraudulent payments before the end of the second half of the year.

Earlier, the FSS issued a Caution-level consumer alert on July 5, warning of growing risks from card fraud linked to phishing and hacking attacks on online shopping platforms.

Lee Jong-o, the FSS deputy governor for digital and IT affairs, said the regulator "takes seriously the situation in which consumer harm from fraudulent payments keeps recurring as online transactions have become part of daily life." He warned that payment gateway companies that neglect fraud prevention in favor of user convenience and revenue expansion "will ultimately lose the market's trust."

Lee said suspicious transactions that slipped past financial institutions' fraud detection systems were also going unchecked by payment gateway companies, leading to financial incidents. "We will communicate closely to ensure the standard operational guidelines being developed this time take root in harmony with the supervisory regime, as an industry-wide integrated response is needed," he said.