South Korean Courts Rule Against Account Holders in Voice Phishing Cases

South Korean courts are diverging from established legal precedent in voice phishing cases, increasingly ruling against account holders who seek to unfreeze accounts linked to fraudulent activities. Traditionally, in debt non-existence lawsuits, the defendant had to prove that a debt was valid. However, this standard is being re-evaluated in the context of voice phishing to prevent victims from suffering further losses.

A recent ruling by the Seoul Central District Court saw a company lose its case against voice phishing victims. The company, which claimed to operate an electronic currency exchange, sued to unfreeze an account that had received 600 million won from seven victims of a phishing scam. The victims had requested the account be frozen after realizing they had been defrauded.

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Interpreting that the victim bears the burden of proof for the facts constituting the right would mean that the victim must prove the criminal facts that state agencies must prove, and as a result, the responsibility is not only transferred to the victim but also aggravated. This leads to an unreasonable result where the legislative purpose of the Electronic Financial Transaction Act is virtually nullified by easily accepting the claims of the account holder.

The court acknowledged that applying the traditional burden of proof to victims would unfairly shift the responsibility of proving criminal activity onto them. "Interpreting that the victim bears the burden of proof for the facts constituting the right would mean that the victim must prove the criminal facts that state agencies must prove, and as a result, the responsibility is not only transferred to the victim but also aggravated," the court stated. "This leads to an unreasonable result where the legislative purpose of the Electronic Financial Transaction Act is virtually nullified by easily accepting the claims of the account holder."

Another court, the Daegu District Court's Gimcheon branch, dismissed a similar case last year. The judge presiding over that case expressed concerns that ruling in favor of account holders could undermine the victim protection measures under the anti-fraud law. This evolving judicial approach signals a move towards prioritizing victim relief in cases where financial accounts become entangled in sophisticated fraud schemes.

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If a ruling in favor of the account holder is made, and the payment suspension measure is lifted based on that ruling, isn't it undermining the victim relief measures under the Electronic Financial Transaction Act?