Voice phishing victims win only 2 in 10 lawsuits against South Korean banks

Victims of voice phishing in South Korea are struggling to recover their losses through legal action, with only about 2 out of every 10 lawsuits against major banks resulting in any compensation over the last five years. Out of 61 lawsuits filed against KB Kookmin, Shinhan, Woori, Hana, and NH Nonghyup banks, totaling 9.32 billion won, only 8 cases (21.6%) saw the customer win either partially or fully. A mere three cases resulted in a complete recovery of the stolen funds.

The difficulty in winning these cases stems largely from how courts interpret bank liability. "Courts have tended to limit the bank's responsibility, citing a lack of direct negligence, making it difficult for victims to win," explained Park Ki-tae, a lawyer involved in such cases. While a recent February ruling ordered a bank to pay 460 million won, or 30% of the 1.5 billion won loss, for failing to adequately verify suspicious activity before releasing a hold on an account, this is considered an exceptional victory.

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Courts have tended to limit the bank's responsibility, citing a lack of direct negligence, making it difficult for victims to win.

Many cases involve customers who proceed with transactions despite banks warning them of suspicious activity. One notable example involved a 70-year-old victim who, after being tricked by a criminal organization, insisted on withdrawing approximately 2.2 billion won from fixed deposit accounts, even after a bank employee advised against it. When the initial large transfer was flagged by the bank's fraud detection system, the victim reportedly called the bank directly to assert their intention to proceed, leading to the restriction being lifted. The court ultimately ruled in favor of the bank, acknowledging its preventative efforts, and the victim did not appeal.

To address the current system, where victims bear the burden of proving bank negligence, there are calls to introduce a "no-fault compensation system." This would allow victims to receive compensation without needing to prove the bank's fault. A proposed amendment to the Telecommunications-based Financial Fraud Act, currently pending in the National Assembly, suggests a compensation limit between 10 million and 50 million won, to be determined by presidential decree. "We must expedite the introduction of a no-fault compensation system so that victims can achieve substantial recovery without relying on lengthy lawsuits," stated Lee In-young, a member of the Democratic Party.

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We must expedite the introduction of a no-fault compensation system so that victims can achieve substantial recovery without relying on lengthy lawsuits.