South Korea warns against loan scams using voice phishing

Such scams are expected to rise with banks’ launching assistance programs.

South Korea’s central bank has issued a warning against loan scams involving voice phishing after losses related to these surged fivefold in the past year.

A total of $1.98m (KRW2.7b) in losses were recorded from loan scams involving voice phishing between January 2023 and Janaury 2024.

Scammers purporting to be from legitimate financial firms ask consumers to give personal information or to switch to a new loan in order to qualify for interest payment refund (cashback), warned the Financial Supervisory Service (FSS). 

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FSS said that it expects such phishing scams taking advantage of financial assistance programs to increase, with banks and non-bank financial institutions having kicked off financial assistance programs for low-income borrowers in early 2024.

“Consumers are advised to be suspicious of such phone calls or text messages. Terminate the phone call and do not click the URL address in the text message,” the FSS said in a statement published on its website.

Starting February 2024, banks have been giving back part of loan interest payments they have received from borrowers, as part of a KRW2.1t financial assistance program for low-income borrowers.

Non-ban financial institutions followed suit in end-March and are set to provide KRW300b of support for interest payments on loans for small business applicants.