Banks may face expanded liability to compensate voice phishing victims

Police officers hand out leaflets to customers during an anti-voice phishing campaign at a commercial bank in Gwangju in this photo taken on Oct. 5, 2022. Yonhap

Commercial banks may be asked to compensate victims of voice phishing scams even when the victims themselves transferred money, according to financial authorities, Tuesday.

This move goes beyond the current practice of banks compensating only for deceptive or unauthorized withdrawals by scammers, implying broader responsibility for lenders to protect customers from financial crimes.

“The Financial Services Commission (FSC), in a special task force involving other relevant financial organizations, is discussing the appropriate level of compensation when victims themselves send money to scammers,” a government official said, asking not to be named.

“Nothing has been finalized yet, as discussions are still in the early stages, but various options are on the table,” he added.

The discussion comes as voice phishing scams grow more organized and sophisticated, taking an increasing toll on consumers.

Data compiled by the National Police Agency (NPA) indicates financial losses from voice phishing scams are expected to surpass 1 trillion won ($718.02 million) for the first time this year.

Losses have already reached 642.1 billion won in the first half of the year, surpassing the 543.8 billion won recorded for all of 2022 and the 447.2 billion won lost in 2023.

“The trend in the first six months of 2025 suggests total losses could easily surpass last year’s record-high of 854.5 billion won,” the official said.

The average loss per victim has also surged, rising 88 percent year-on-year from 28.13 million won in the first quarter of 2024 to 53.01 million won during the same period in 2025.

To advance plans for tougher compensation, the FSC is reviewing cases from countries such as the United Kingdom and Singapore, where responsibility for repaying voice phishing losses is stricter than in Korea.

For example, in the U.K., financial institutions and telecom companies share responsibility and provide compensation up to about 100 million won, according to the FSC.

A representative from a major commercial bank said, “We’ll fully cooperate with the regulatory body in protecting customers from financial crimes.”

However, whether banks will fully comply if the plan is implemented remains uncertain, as it could impose substantial financial burdens.

“Expanding the scope of compensation is definitely a good direction, but it’s questionable whether the corresponding companies can bear the costs,” said Kang Kyeong-hoon, a professor at Dongguk University’s Department of Business Administration.

Kang also warned of potential unintended consequences, such as the emergence of fraudulent claims by individuals pretending to be phishing victims in order to receive compensation.

“Therefore, adequate preventive measures must be put in place to ensure the effectiveness of the plan,” he said.

To encourage banks to voluntarily participate in the initiative, market observers said it is necessary to establish a cap on compensation and other clear criteria to avoid excessive burdens on the companies.