Banks panic as SMishing phone scams proliferate

Korean banks are stepping up efforts to caution customers about financial fraud via mobile text messages, a new type of scam that has recently become rampant in the country, bank officials said.

The scam called SMishing, a combination of short message services (SMS) and phone fraud schemes known as phishing, uses mobile phone texts to lure people to access bogus Web sites with malignant codes and dupe them into revealing their bank or credit card information. SMishing has become more prevalent due to the wide use of smartphones these days, according to the officials. As of August, nearly 30 million people, or about 60 percent of the population in Korea, were estimated to use smartphones. Banks said they are on high alert to protect customers, sending out notices to employees to inform clients about such fraud cases and help them avoid becoming a victim.

“If customers suffer any financial losses due to these scams, they may lose trust in the bank,” said an official from top local lender KB Kookmin Bank. “We have also warned users of our Internet banking against fake text messages.”

Bank officials, however, have raised concerns that individual efforts by private financial institutions alone are not enough to ward off the newly emerged scam.

“Banks should work together and take more aggressive steps such as creating advertisements so as to warn customers more effectively,” a bank official said. “But the government should also provide institutional support and come up with measures to block scammers from faking the banks’ phone numbers when sending out fraudulent text messages.”

Currently, the government has begun legislative proceedings to revise a law so that callers may be banned from manipulating the phone number that shows up on the recipients’ phones.

Yonhap