Spam text messages to be blocked

The Financial Supervisory Service announced Sunday that it will set up a system to block spam text messages sent by scammers impersonating financial firms or government organizations this year.

By Kim Tae-jong

Financial regulators will soon set up a system to block spam text messages sent by scammers impersonating financial firms or government organizations.

The move comes amid growing concerns over possible fraud using recently leaked consumer data.

“We will work with telecom operators to launch a blocking system against SMS phising or ‘smishing’ texts, this year,” an official from the Financial Supervisory Services (FSS) said.

Under the system, mobile carriers will automatically detect fraudulent text messages by scammers who pretend to be a financial firm or government entity and immediately block them to prevent consumers falling victim to such fraud, according to the FSS.

There has been an increase in the number of victims of phishing scams. About 30,000 such scams have been reported to the financial authorities since September 2011.  

This is the latest measure designed to protect consumers in the wake of massive data breaches that have affected millions of consumers.

Most recently, the personal information of over 100 million credit card customers of KB Kookmin Card, NH NongHyup Card and Lotte Card were stolen.

The information included clients’ names; resident registration numbers; phone numbers; home and office addresses; and credit card expiration data. Contrary to the authorities’ initial report, confidential data related to 80 million credit cards have been sold to third parties, including private moneylenders.

Consequently, these data have become susceptible to criminal activities, which have prompted the financial authorities to announce a series of measures to counter the risk.

Beginning today, Woori and Busan banks will test-operate a detector system at counters to verify whether customers’ identification cards are fake before carrying out any transaction.

“We will have 14 other banks adopt it from August, and are also considering expanding the application of the new measure to other financial services providers such as savings banks,” the FSS official said.  

In partnership with police and telecommunications firms, the FSS has also cut off phone services of illegal loan providers who are the main buyers of “leaked customer data” for their businesses.

Since the launch of the measure on Feb. 6, they have suspended over 1,400 telephone numbers used by illegal payday loan lenders.

The authorities will also require banks to take more efforts to weed out all bank accounts in “stolen names” ― using others' names without their knowledge ― which are used in phishing scams.

The FSS will inspect banks whose screening systems have loopholes that scammers can abuse for criminal activity.

The authorities also started to offer rewards to those who report illegal trading of stolen customers’ information from March 3.  Financial firms will also have to pay fines of up to 3 percent of their total sales if they are found to have used stolen customer data, beginning in July.