Telecom companies urged to work closer with banks against phishing scams

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Telecommunications companies are urged to take a more active role in countering voice phishing scams, as commercial banks have a limited ability to prevent the financial crimes, with a broader level of cooperation essential across industry borders, critics said Friday.

They noted that multiple lenders have been offering insurance, free to their customers, to help victims of voice phishing scams make up losses.

These companies include Shinhan Bank, which compensates up to 20 million won ($14,540), and Woori Bank, which compensates up to 10 million won, to each victim based on a police-issued report that shows the amount lost to a scam.

Additionally, Shinhan Bank has adopted artificial intelligence (AI) to more thoroughly monitor any suspected financial transactions via its ATMs nationwide, while Woori Bank has been awarding outstanding employees who prevent voice phishing scams.

“Despite all these efforts in the financial sector, voice phishing scams continue to persist as banking customers are still exposed to crimes that begin with a phone call,” a researcher at an advocate group for financial customers said, asking not to be named.

The researcher added that telecom companies “lack effort in preventing voice phishing scams in advance.”

“They fail to take effective action to terminate the suspicious calls, although they can identify calls in which scammers keep victims on the phone for over an hour and deliberately prevent them from hanging up,” he said.

“The unusually long phone conversation is intended to block any intervention from banks, meaning victims can’t get away from the situation unless the telecom company actively steps in.”

A member of another civic activist group said on the condition of anonymity that the country’s three major mobile carriers — SK Telecom, KT and LG Uplus — should make more efforts to compensate victims.

He noted that while the three companies offer free insurance to make up losses, the insurance is typically valid for six months. Moreover, the service is only available for selected customers.

“Since financial institutions are involved at the final stage of the damage, greater social responsibility from telecom companies is essential for prevention,” he said.

“Effective prevention, post-incident compensation and strict punishment of perpetrators all require collaboration across various industries and the government,” he added.