Phone fraud ring broken up, 9 to face charges

The police announced yesterday they had broken up a four-man cybercrime ring that pocketed 6.6 billion won ($5.9 million) from more than 130,000 people since November through a mobile phone scam.

The scheme worked by encouraging people to sign up to one of 24 free movie download Web sites, then using their registration information to charge small sums to the subscribers’ cell phones.

The Gwangju Metropolitan Police Agency issued a preliminary arrest warrant yesterday for a 35-year-old identified only by his surname, Kim, and booked the remaining three, including a computer programmer, without detention on the same charge.

Kim, who ran those Web sites from November until last month, denied any wrongdoing in interviews with police before the warrant for his arrest was issued.

To manipulate the payment system, the four allegedly conspired with five workers from payment gateway companies, the e-commerce businesses responsible for electronic billing of phone users’ accounts. The five employees, including a 37-year-old man surnamed Lee, altered the subscribers’ SMS notice messages so they would not receive any indication that their accounts had been charged.

The police also booked all the payment agency employees without detention.

The four-member fraud ring charged the Web sites’ subscribers 16,500 won each every month, shifting payment gateway companies to evade detection.

The employee named Lee also allegedly helped the group find additional payment gateway companies for the scam.

Amid the increasing use of mobile payment systems, the Gwangju police said tougher law regulations are needed to stamp out such scams.

“Payment authorization should be required for every form of mobile payment,” said Lee Myung-cheol, an official from the Gwangju police cybercrime division.

“Police forces will keep vigilant for possible frauds that use automated systems and will strengthen the monitoring system,” Lee said.

In South Korea, which has the world’s highest smartphone penetration rate, phone-related fraud is on the rise.

One such scam, as in this case, is to use mobile phone advertising messages to lure people into accessing bogus Web sites and then trick them into providing their bank or credit card information.

BY PARK EUN-JEE [ejpark@joongang.co.kr]