Financial regulator launches industry-wide probe into voice phishing ghost accounts

South Korea's financial regulator has launched an industry-wide probe into so-called ghost accounts — bank accounts used as money-laundering conduits by voice phishing rings — after criminal organizations began exploiting foreign currency accounts as a new channel for illicit fund transfers.

The Financial Services Commission said Thursday it held the second meeting of its financial-sector voice phishing eradication council at Woori Bank's headquarters in Seoul, chaired by FSC Vice Chairman Kwon Dae-young. Representatives from the Korean National Police Agency, the National Tax Service, the Financial Supervisory Service, the Korea Financial Security Institute and major financial firms attended to discuss next steps.

The FSC plans to assess the scale of ghost account use across all financial institutions and review measures — in coordination with the Ministry of Justice, the National Tax Service and the Korean National Police Agency — against confirmed accounts. Regulators will also examine ways to tighten the system to prevent new ghost accounts from emerging. The push comes after phishing networks began turning to foreign currency accounts as a workaround, following the FSS's earlier move to lower gift-card sales limits to curb gift-card-based money laundering.

The sharing of voice phishing intelligence among financial institutions, telecom companies and investigative agencies is also expanding. An amended Telecommunications Fraud Victim Compensation Act took effect Aug. 4, establishing a legal basis for agencies to pool their data through the Voice Phishing Information Sharing and Analysis AI Platform, known as ASAP, and use it to freeze accounts, block communications and support investigations. Since the law took effect, telecom carriers have shared more than 100 items of information — including phone numbers suspected of being used in phishing operations — through ASAP.

Financial institutions are also working to feed information received from telecom companies and investigative agencies into their Fraud Detection Systems. The approach broadens the scope of suspicious-transaction detection by incorporating not only flagged accounts but also indicators such as the installation of remote-control malware and the activation of new mobile phone lines.

Starting Oct. 1, a new regime will also address cases where voice phishing proceeds are moved into virtual assets. Under the amended Telecommunications Fraud Victim Compensation Act, authorities will be able to detect suspicious transactions, freeze accounts and recover stolen funds involving virtual assets.

From last October through the end of July this year, banks shared 463,000 pieces of voice phishing intelligence through ASAP. Based on that data, 7,009 accounts were frozen and the FSC said it had prevented an estimated 66.36 billion won ($47.3 million) in losses.

"We plan to conduct inspections and push for system improvements across all financial institutions to root out ghost accounts, which have become a breeding ground for all manner of crime," Kwon said. "We will continue to deepen collaboration across ministries, agencies and sectors to reduce the damage caused by voice phishing and other financial crimes."

Meanwhile, the number of ghost accounts detected and frozen for use in voice phishing and other scams has been rising sharply each year. According to the FSS's bond extinguishment public notices, the monthly tally of frozen ghost accounts exceeded 4,500 for the first time in March — triple the monthly average of roughly 1,500 recorded two years ago.