Article 1(Purpose) #
The purpose of this Act is to prescribe Government measures to prevent loss and financial companies' responsibilities for the prevention of loss in an attempt to prevent telecommunications-based financial fraud, and to stipulate procedures for extinguishment of claims for accounts exploited for fraud, procedures for the compensation of loss, etc. in order to compensate loss to victims of telecommunications-based financial fraud so as to contribute to the prevention of telecommunications-based financial fraud and rapid recovery of property loss of victims.
[This Article Wholly Amended on Jan. 28, 2014]
Article 2(Definitions) #
The terms used in this Act are defined as follows: <Amended on Jan. 28, 2014; May 29, 2016; May 16, 2023>
1. The term "financial company" means any of the following institutes:
(a) Banks under the Banking Act;
(b) The Korea Development Bank under the Korea Development Bank Act;
(c) The Industrial Bank of Korea under the Industrial Bank of Korea Act;
(d) The Korea Export-Import Bank established under the Korea Export-Import Bank Act;
(e) An investment trader, investment broker, syndicate business entity, trust business entity, financial securities company, merchant bank, and transfer agency under the Financial Investment Services and Capital Markets Act;
(f) A mutual savings bank and the Korea Federation of Savings Banks under the Mutual Savings Banks Act;
(g) An agricultural cooperative and the National Agricultural Cooperatives Federation and Nonghyup Bank under the Agricultural Cooperatives Act;
(h) A fisheries cooperative, the National Federation of Fisheries Cooperatives, and Suhyunp Bank under the Fisheries Cooperatives Act;
(i) Credit union and the National Credit Union Federation of Korea under the Credit Unions Act;
(j) A community credit cooperative and the Korean Federation of Community Credit Cooperatives under the Community Credit Cooperatives Act;
(k) An insurance company under the Insurance Business Act;
(l) A postal service office under the Postal Savings and Insurance Act;
(m) Other institutions providing financial services prescribed by Presidential Decree;
2. The term "telecommunications-based financial fraud" means any of the following acts intended to obtain, or have a third party obtain, monetary or economic gain by fraud or extortion from other persons, using telecommunications defined in subparagraph 1 of Article 2 of the Framework Act on Telecommunications: Provided, That feigning the provision, arrangement, and brokerage of loans shall be included whereas feigning the supply of goods or services, etc. shall be excluded:
(a) Inducing a person to remit or transfer money;
(b) Remitting or transferring money after extracting personal information;
(c) Delivering or causing money to be delivered;
(d) Withdrawing money or having money withdrawn;
2-2. The term "electronic financial transaction" means a transaction in which a financial company provides a user with a financial product or service via electronic devices and such user, without meeting or communicating directly with employees of financial companies, uses such product or service via automated means;
3. The term "victim" means a person that has suffered economic loss due to telecommunications-based financial fraud;
4. The term "account exploited for fraud" means the account to which money of a victim has been remitted or transferred, the account into which money delivered by a victim or withdrawn from his or her account is deposited, and the account used for transferring money from the relevant account, due to telecommunications-based financial fraud.;
5. The term "amount of loss" means money remitted or transferred from the account of a victim to the account exploited for fraud, or delivered by a victim or withdrawn from his or her account due to telecommunications-based financial fraud;
6. The term "compensation for loss" means money paid by a financial company to a victim, which is calculated pursuant to Article 10 based on a claim extinguished pursuant to Article 9, in order to compensate the amount of loss;
7. The term "user" means a person that engages in electronic financial transactions under a contract concluded with a financial company.
Article 2-2(Response to Telecommunications-Based Financial Fraud) #
(1) To prepare for telecommunications-based financial fraud and minimize any loss, the Financial Services Commission shall conduct the following duties:
1. Collection and distribution of information on telecommunications-based financial fraud;
2. Forecasting and warning on telecommunications-based financial fraud;
3. Other countermeasures prescribed by Presidential Decree to respond to telecommunications-based financial fraud.
(2) When deemed necessary to prevent telecommunications-based financial fraud, the Financial Services Commission may recommend, request, or order the following matters to financial companies falling within the criteria determined by the Financial Services Commission or executives or employees of such companies, or order such companies and executive officers to submit improvement plans, considering the annual amount of compensation paid for loss and the number of occurrence of exploited accounts for fraud:
1. Cautioning, warning, reprimanding or reducing salary of financial companies and executive officers or employees of such companies;
2. Matters concerning improvement or supplementation of personnel and facilities for computerization, electronic devices, etc., that are necessary for financial companies to secure safety and reliability in conducting electronic financial transaction business.
(3) The Financial Services Commission may fully or partially entrust the duties referred to in paragraphs (1) and (2) to the Governor of the Financial Supervisory Service established under the Act on the Establishment, etc. of Financial Services Commission (hereinafter referred to as "FSS Governor").
(4) When the Governor of the Financial Supervisory Service is entrusted with the affairs referred to in paragraph (1) 3 pursuant to paragraph (3), he or she shall promptly formulate and implement an implementation plan necessary for responding to telecommunications-based financial fraud. <Newly Inserted on May 16, 2023>
[This Article Newly Inserted on Jan. 28, 2014]
Article 2-3(International Cooperation) #
The Government shall cooperate with other nations or international organizations to prevent loss that may be caused by telecommunications-based financial fraud.
[This Article Newly Inserted on Jan. 28, 2014]
Article 2-4(Responsibilities of Financial Companies for Prevention of Loss) #
(1) To prevent loss that may be caused by telecommunications-based financial fraud, when a user conducts any of the following, every financial company shall take measures to identify such user as prescribed by Presidential Decree (hereinafter referred to as "measure for identification"): Provided, That the same shall not apply to cases prescribed by Presidential Decree where a user as a corporation does not wish to proceed with measures for identification or where it is impracticable to take measures for identification such as where a user is sojourning abroad: <Amended on Jan. 27, 2016>
1. Where a user applies for a loan to a financial company;
2. Where a user withdraws a savings deposit, installment savings, and premiums he/she has subscribed under a contract concluded with a financial company, or other financial products prescribed by Presidential Decree.
(2) Where a user sustains a loss due to a financial company that fails to take measures for identification, in violation of paragraph (1), the financial company shall be liable to indemnify such loss.
[This Article Newly Inserted on Jan. 28, 2014]
Article 2-5(Interim Measures for Accounts of Users) #
(1) In any of the following cases, a finance company shall take measures to delay or temporarily suspend the transfer, remittance, or withdrawal of all or part of the relevant user's account (hereinafter referred to as "interim measures"). <Amended on May. 16, 2023; Feb. 27, 2024>
1. Where a self-inspection is conducted on a regular basis in accordance with the procedures prescribed by Presidential Decree, and where it is deemed that there are reasonable grounds to presume that the user's account is used as a suspicious transaction account that may cause damage to telecommunications-based financial fraud (hereinafter referred to as "suspicious transaction account")
2. Where he or she is provided with information that the user's account is presumed to be an account of suspected damage transaction pursuant to Article 15 (3).
(2) Where a financial company has taken the interim measure under paragraph (1), it shall notify the relevant user of matters concerning the interim measure without delay and take the measure for identification.
(3) Where a financial company finds, after taking the measure for identification referred to in paragraph (2), that the account of the relevant user is not an account for unconscionable transactions, it shall cancel the interim measure referred to in paragraph (1).
(4) Where a finance company has notified or canceled ad interim measure or taken measures for identification under paragraphs (2) and (3), it shall retain the details thereof in writing, tape-recording, or at least one of the methods prescribed by Presidential Decree, as prescribed by Presidential Decree. <Newly Inserted on Feb. 27, 2024>
[This Article Newly Inserted on Jan. 28, 2014]
Article 2-6(Confirmation of Purpose of Financial Transactions) #
(1) In order to prevent loss of telecommunications-based financial fraud, a financial company shall verify the purpose of financial transactions of customers in any of the following cases. In such cases, a financial company shall prepare and operate business guidelines for such purpose:
1. Where a customer applies for opening an account;
2. Where a customer intends to lift the limit on the transfer, remittance, and withdrawal of money to an account under paragraph (4);
3. Other cases prescribed by Presidential Decree.
(2) Financial Companies may request customers to submit relevant evidential documents for verification under paragraph (1), as prescribed by Presidential Decree.
(3) Where a finance company finds from the verification under paragraph (1), that the purpose of a financial transaction is related to telecommunications-based financial fraud or where it is impossible to verify the financial transaction because the customer refuses to provide information for identification, etc., the finance company may refuse to open the relevant account or terminate the existing account.
(4) Where a customer fails to submit evidential documents under paragraph (2) or where the evidential documents submitted are not sufficient to verify the purpose of financial transactions, a finance company may restrict the limit of transfer, remittance, and withdrawal of an account.
[This Article Newly Inserted on Feb. 27, 2024]
Article 2-7(Establishment of Integrated Reporting and Response Center for Telecommunications-Based Financial Fraud) #
(1) The Integrated Reporting and Response Center for Telecommunications-Based Financial Fraud (hereinafter referred to as the "Center") shall be established under the Korean National Police Agency to efficiently conduct affairs, such as reporting and receiving information on telecommunications-based financial fraud.
(2) The Center shall perform the following business affairs:
1. Receipt of reports and consultation on telecommunications-based financial fraud;
2. Receipt and handling of information on telecommunications-based financial fraud;
3. Issuance of a forecast and warning on telecommunications-based financial fraud;
4. Consultation on refund of the amount of loss caused by telecommunications-based financial fraud;
5. Request for suspension of payment of account exploited for fraud used for telecommunications-based financial fraud and provision of information in cases of a suspected fraudulent account;
6. Request for suspension of provision of telecommunications services to telephone numbers used for telecommunications-based financial fraud;
7. Analysis of data on information on telephone numbers used for telecommunications-based financial fraud and accounts used for fraud and dissemination of information to relevant administrative agencies and related institutions, corporations, and organizations;
8. Other duties prescribed by Presidential Decree as necessary for responding to telecommunications-based financial fraud.
(3) The Commissioner General of the Korean National Police Agency may request relevant administrative agencies, related institutions, corporations, or organizations to dispatch public officials or executive officers and employees under their control, as prescribed by Presidential Decree, if necessary to perform the duties of the Center.
(4) Other matters on the composition, operation, etc. of the center shall be prescribed by Presidential Decree.
[This Article Newly Inserted on Feb. 27, 2024]
Article 3(Application for Remedy for Loss) #
(1) A victim may apply for the remedy for property loss caused by telecommunications-based financial fraud, such as suspension of payment from an account exploited for fraud, to the financial company that manages the account from which the amount of loss has been remitted or transferred or to the financial company that manages the account exploited for fraud. <Amended on May 16, 2023>
(2) An investigative agency may request a financial company managing an account exploited for fraud to suspend the payment from the account exploited for fraud related to the act falling under subparagraph 2 (c) or (d) of Article 2. <Newly Inserted on May 16, 2023>
(3) Where an investigative agency requests the suspension of payment under paragraph (2), it shall specify the victim and the amount of loss and notify the financial company managing the account exploited for the relevant fraud by the deadline prescribed by Presidential Decree from the date the request is made. <Newly Inserted on May 16, 2023>
(4) Where the amount of loss has been remitted or transferred to an account exploited for fraud of other financial company, the financial company which has received an application for the remedy for loss under paragraph (1) shall provide the relevant financial company with necessary information and request the same to suspend payment. <Amended on May 16, 2023>
(3) Matters necessary for an application for the remedy for loss under paragraph (1), a request for the suspension of payment, and the method, procedure, etc. for the notification of the victim and the amount of loss under paragraph (2) through (4), and others shall be prescribed by Presidential Decree. <Amended on May 16, 2023>
[Title Amended on May 16, 2023]
Article 4(Suspension of Payments) #
(1) In any of the following cases, if a financial company suspects that an account is being exploited for telecommunications-based financial fraud through confirmation of the details of transactions, etc., it shall immediately take measures to suspend payments on all of such account exploited for fraud: <Amended on Jan. 28, 2014; May 16, 2023; Feb. 27, 2024>
1. Where there is an application for remedy for loss under Article 3 (1) or a request for the suspension of payments under Article 3 (2) or (4);
2. Where an investigative agency or the Financial Supervisory Service established under the Act on the Establishment of Financial Services Commission (hereinafter referred to as "Financial Supervisory Service") provides the financial company with information that an account is suspected of being exploited for fraud;
3. Where an account is assumed to be exploited for fraud after taking the measure to identify the account as an account for unconscionable transactions under Article 2-5 (2);
4. Where he or she is provided with information on an account exploited for fraud pursuant to Article 15 (3);
5. Other matters prescribed by Presidential Decree.
(2) Where a financial company has taken measures to suspend payments pursuant to paragraph (1), it shall notify the following persons of matters regarding such measures for the suspension of payments without delay: Provided, That where the financial company does not know the whereabouts of the account holder under subparagraph 1, it shall publicly disclose the fact regarding measures to suspend payments on its website, etc., and the notification shall be made to the victim under subparagraph 3, if the notification by an investigative agency under Article 3 (3) or 6 (2) is made to the victim: <Amended on Jan. 28, 2014; May 16, 2023>
1. A holder of the account exploited for fraud, payment from which has been suspended pursuant to paragraph (1) (hereinafter referred to as "account holder");
2. A victim that has applied for the remedy for loss pursuant to Article 3 (1);
3. A victim notified to the financial company pursuant to Article 3 (3) or 6 (2);
4. A financial company that manages the relevant accounts into which the amount of loss is remitted or transferred;
5. The Financial Supervisory Service;
6. Investigative agency: Provided, That this shall be limited to cases where information is provided pursuant to paragraph (1) 2 and cases where a request for suspension of payment is made pursuant to Article 3 (2).
Article 4-2(Prohibition of Attachment after Suspension of Payment) #
(1) No one shall commit any act falling under any of the following, regarding all or part of claim on an account exploited for fraud out of which payment has been suspended under Article 4: Provided, That the same shall not apply where suspension of payment is terminated: <Amended on Mar. 13, 2018>
1. Filing a lawsuit such as a lawsuit claiming damages or restitution of unjust enrichment;
2. Requesting attachment, provisional attachment, or provisional disposition under the Civil Execution Act;
3. Initiating procedures to collect delinquent taxes under the National Tax Collection Act;
4. Establishing pledge right.
(2) An account holder or victim may file a lawsuit to affirm non-existent debt or a lawsuit to request a return of unfair profits, notwithstanding the main clause of paragraph (1). <Newly Inserted on Mar. 13, 2018>
[This Article Newly Inserted on Jan. 27, 2016]
Article 5(Public Announcement on Commencement of Procedure for Extinguishment of Claims) #
(1) Where a financial company has taken measures to suspend payments pursuant to Article 4, it shall, without delay, request the Financial Supervisory Service to make a public announcement of the commencement of the procedure for extinguishment of claims (hereinafter referred to as "procedure for extinguishment of claims") of the account holder, as prescribed by Presidential Decree: Provided, That this shall not apply where all or some of the claims held by the account holder fall under any of the following cases, and where the measure of suspension of payment is taken in accordance with a request for suspension of payment under Article 3 (2), a request for public announcement shall be made when the notification under paragraph (3) of that Article is made: <Amended on Jan. 27, 2016; Mar. 13, 2018; May 19, 2020; May 16, 2023>
1. Where a lawsuit such as a lawsuit claiming damages or reinstitution of unjust enrichment has been filed and pending in court before suspending payment under Article 4;
2. Where an attachment, provisional attachment or provisional disposition order under the Civil Execution Act has been executed before suspending payment under Article 4;
3. Where a procedure to collect delinquent taxes under the National Tax Collection Act has been commenced before suspending payment under Article 4;
4. Where a right of pledge has been established before suspending payments under Article 4;
5. Where a lawsuit, such as a lawsuit to affirm non-existent debt or to request a return of unfair profits, between an account holder and victim has been filed pursuant to Article 4-2 (2) after suspending payment and pending in court;
6. Where the balance of the account exploited for fraud, the payment of which has been suspended pursuant to Article 4, does not exceed the amount prescribed by Presidential Decree, which shall not exceed 30,000 won: Provided, That the foregoing shall not apply where a victim requests a financial company to commence a procedure for extinguishment of claims within 30 days from the date on which he/she receives notification of suspension of payment.
(2) Where the Financial Supervisory Service is requested to publicly announce the commencement of the procedure for extinguishment of claims pursuant to paragraph (1), it shall publicly announce the following matters without delay, as prescribed by Presidential Decree: <Amended on Jan. 28, 2014>
1. The effect that the procedure for extinguishment of claims has been commenced in connection with telecommunications-based financial fraud;
Article 6(Remedies for Losses after Commencement of Procedure for Extinguishment of Claims) #
(1) A person who fails to apply for the remedy for losses before the commencement of the procedure for extinguishment of claims is publicly announced, as a victim of an account exploited for fraud on which the Financial Supervisory Service has made a public announcement of the commencement of the procedure for claims pursuant to Article 5 (2), may apply for the remedy for losses to the relevant financial company within two months of the date of public announcement under Article 5 (2).
(2) An investigative agency may notify a financial company of the additional victim and amount of loss related to an account exploited for fraud for which the public announcement of the commencement of procedure for extinguishment of claims has been made under Article 5 (2) within two months from the date of public announcement under Article 5 (2). <Amended on May 16, 2023>
(3) A financial company shall request the Financial Supervisory Service to publicly announce the commencement of a procedure for extinguishment of claims on the relevant amount of loss, if: <Newly Inserted on May 16, 2023>
1. Where it is deemed that the applicant, with respect to an application for the remedy for loss under paragraph (1), is recognized as a victim by verifying the details of the relevant transaction, etc.;
2. Where notification is made by an investigative agency pursuant to paragraph (2);
(4) The Financial Supervisory Service requested to make a public announcement pursuant to paragraph (3) shall publicly announce the relevant matters without delay. In such cases, Article 5 (1) and (2) shall apply mutatis mutandis to a request for, and public announcement of, the commencement of the procedure for extinguishment of claims. <Amended on May 16, 2023>
(5) A financial company and the Financial Supervisory Service shall actively endeavor to provide necessary information, etc., so that a victim who has failed to apply for the remedy for loss before the commencement of the procedure for extinguishment of claims is publicly announced may apply for the remedy for loss pursuant to paragraph (1). <Amended on May 16, 2023>
Article 7(Raising Objection to Suspension of Payment, etc.) #
(1) In any case of the following cases, an account holder may raise an objection to the suspension of payment, restriction of electronic financial transactions, or procedure for extinguishment of claims from the date payment is suspended pursuant to Article 4 (1) or electronic financial transaction is restricted pursuant to Article 13-2 (3) to the date on which two months lapses after the date of public announcement referred to in Article 5 (2): <Amended on Jan. 28, 2014; Mar. 13, 2018; Feb. 27, 2024>
1. Where the account holder vindicates the relevant account is not used for fraud;
2. Where the account holder vindicates that he or she received all or part of the claims to be extinguished under Article 9 in return for providing goods or services or acquires by other lawful sources of right with objective materials: Provided, That this shall not apply where he/she is aware of the fact that the relevant account was used for telecommunications-based financial fraud by verifying details of how the account was used for fraud, or transaction behaviors or statement, or where it is deemed that he/she fails to be aware of the fact due to gross negligence.
3. Where he or she vindicates objective evidence that the relevant account is not an account used to defraud the amount of loss.
(2) Where an objection filed under paragraph (1) falls under any subparagraph of paragraph (1), the financial company shall accept the objection and immediately notify the victim who has applied for remedy for losses (including the victim notified to the financial company pursuant to Article 3 (3) or 6 (2); hereinafter the same shall apply) and the Financial Supervisory Service. <Amended on Mar. 13, 2018; May 16, 2023>
(3) Matters necessary for the method and procedure for the account holder to raise objections, etc. shall be prescribed by Presidential Decree.
[Title Amended on Jan. 28, 2014]
Article 8(Termination of Suspension of Payments) #
(1) In any of the following cases, a financial company and the Financial Supervisory Service shall terminate suspension of payments, procedure for extinguishment of claims, and restriction of electronic financial transactions against the account holder under this Act of all or some of the accounts exploited for fraud: Provided, That they shall not terminate the restriction of electronic financial transactions in cases of falling under subparagraph 1 and Article 13-2 (1) 1 through 3: <Amended on Jan. 28, 2014; Jan. 27, 2016; Mar. 13, 2018; May 19, 2020; Feb. 27, 2024>
1. Where an event falling under Article 5 (1) 1 through 4 arises;
1-2. Where a reason falling under Article 5 (1) 5 arises;
2. Where an objection is raised under Article 7 (1): Provided, That where an objection is raised under subparagraph 3 of that paragraph, it shall be limited to the amount excluding the amount of loss incurred from telecommunications-based financial fraud among the amount deposited in the relevant account exploited for fraud;
3. Where the Financial Supervisory Service or an investigative agency acknowledges that the relevant account is not an account exploited for fraud;
4. Where a compensation for the amount of loss has been paid;
5. Other matters prescribed by Presidential Decree.
(2) Where the Financial Supervisory Service or an investigative agency deems that the relevant account is not an account exploited for fraud:
1. Where a claim is pending at the court pursuant to Article 5 (1) 1;
1-2. Where a lawsuit is pending in court under Article 5 (1) 5 (limited to the amount of loss arising from the telecommunications-based financial fraud from among the amount of money deposited in the relevant account used for fraud);
2. Before two months lapse from the date a victim is notified of the fact that the account holder has raised an objection pursuant to Article 7 (2): Provided, That where the account holder fully explains that the relevant account falls under any of the subparagraphs of Article 7 (1) and his or her explanation is deemed to have sufficient grounds, the suspension of payments may be terminated.
(3) Where a financial company or the Financial Supervisory Service has terminated the suspension of payments and the procedure for extinguishment of claims pursuant to paragraphs (1) and (2), it shall notify the relevant account holder, the victim that has applied for the remedy for loss and the related financial company, of such fact without delay.
Article 9(Extinguishment of Claims) #
(1) Claims (limited to the amount for which the Financial Supervisory Service has made a public announcement of the commencement of procedure for the extinguishment of claims under Articles 5 (2) and 6 (4)) of the account holder shall be extinguished if two months have elapsed from the date of public announcement of the commencement of the first procedure for the extinguishment of claims under Article 5 (2). <Amended on May 16, 2023>
(2) Where claims of the account holder have been extinguished pursuant to paragraph (1), the Financial Supervisory Service shall notify the relevant account holder, the victim who has applied for the remedy for loss, and the related financial company pursuant to Articles 3 and 6 of the following matters: Provided, That where the Financial Supervisory Service does not know the whereabouts of the account holder, it shall announce the relevant fact publicly on the Internet homepage, etc. of the Financial Supervisory Service and the relevant financial company:
1. The fact that claims of the relevant account holder have been extinguished pursuant to paragraph (1);
2. The amount of claims extinguished;
3. Other matters prescribed by Presidential Decree.
Article 10(Determination and Payment of Refund for Loss) #
(1) The Financial Supervisory Service shall determine the person who is to receive a refund for loss and the amount thereof within 14 days from the date the relevant claims are extinguished pursuant to Article 9 (1) and then notify the victim who has applied for the remedy of loss and the financial company pursuant to Articles 3 (1) and 6 (1) of the details thereof, and the financial company notified of such details shall pay the victim such refund for loss without delay.
(2) Where the sum of loss exceeds the amount of claims extinguished, the refund for loss under paragraph (1) shall be the amount calculated by multiplying the amount of claims extinguished by the ratio of the amount of loss of each victim to the total amount of loss, and in other cases, it shall be the relevant amount of damage.
(3) The Financial Supervisory Service may request a financial company to submit necessary materials to determine the refund for loss under paragraph (2).
(4) Other necessary matters concerning the determination and payment of the refund for loss, etc. shall be prescribed by Presidential Decree.
Article 11(Persons Unentitled to Refund for Loss) #
None of the following persons shall be paid a refund for damage:
1. A victim in whose case the amount of loss arising from the relevant telecommunications-based financial fraud has been compensated in full, and his/her successor;
2. A person who has profiteered in connection with the relevant telecommunications-based financial fraud, etc.;
3. A person who has participated in the relevant telecommunications-based financial fraud, etc. as an accomplice or who is the perpetrator of illegality;
4. Other persons prescribed by Presidential Decree.
Article 11-2(Liability for Damages Following Application for False Damage Remedy) #
A person who falsely applies for a remedy for loss under Article 3 (1) or 6 (1) shall be liable to compensate for such loss if the account holder of an account whose payment has been suspended pursuant to Article 4 (1) suffers loss due to his or her application for a remedy for loss.
[This Article Newly Inserted on Feb. 27, 2024]
Article 12(Relations with Claims for Damages) #
Where a victim has been paid a refund for loss from a financial company according to this Act, a claim for damages caused by the relevant telecommunications-based financial fraud and other rights of claim shall be extinguished within the limits he/she has been paid a refund.
Article 13(Claim for Refund of Extinguished Claims) #
(1) Where the holder of a title deed whose claims have been extinguished pursuant to Article 9 meets all the following prerequisites, he/she may request the Financial Supervisory Service to make a refund of the claims extinguished: <Amended on Mar. 13, 2018; Feb. 27, 2024>
1. Any of the cases referred to in the subparagraphs of Article 7 (1);
2. Where there is a justifiable ground why the account holder has failed to raise an objection under Article 7 (1).
(2) The Financial Supervisory Service shall take out an insurance or join a mutual aid to pay a refund under paragraph (1), as prescribed by Presidential Decree.
Article 13-2(Restriction of Electronic Financial Transactions on Account Holders of Accounts Exploited for Fraud) #
(1) Where a holder of a title deed who has been notified of matters regarding measures to suspend payment under Article 4 (2) or has been subject to measures to suspend payment under Article 4 (1) verifies any of the following facts, the Financial Supervisory Service shall designate the relevant holder of the title as a person for whom electronic financial transactions are restricted (hereafter referred to as "person subject to restriction of electronic financial transactions" in this Article): <Amended on Jan. 27, 2016; May 19, 2020>
1. A person who transfers or lends an access medium while falling under any of Article 49 (4) 1 through 3 of the Electronic Financial Transactions Act (limited to cases involving telecommunications-based financial fraud or when it is confirmed that three years have not elapsed since the date of being sentenced to a fine or five years has not elapsed since the date of being sentenced to imprisonment (including suspension of execution) as a pledge to the access medium;
2. Where three years have not passed since he/she was sentenced to punishment by a fine or imprisonment with labor (including suspension of execution), as a person who provided information on an account with the relevant person under Article 49 (4) 5 of the Electronic Financial Transactions Act (limited to cases related to telecommunications-based financial fraud), or was sentenced to such imprisonment with labor;
3. Where it is confirmed that three years have not passed since he/she was sentenced to a fine for committing an offense for telecommunications-based financial fraud or five years have not passed since he/she was sentenced to imprisonment with labor (including suspension of execution).
(2) When the Financial Supervisory Service has designated an account holder as a person subject to restriction of electronic financial transactions under paragraph (1), it shall notify the financial company and the account holder thereof without delay: Provided, That where the whereabouts of the account holder are unknown, notice to the account holder shall be deemed made in lieu of the public announcement referred to in Article 5 (2).
(3) No financial company shall settle electronic financial transactions of persons subject to restriction of electronic financial transactions, who is notified of under paragraph (2).
(4) Where a person designated as a person subject to restriction of electronic financial transactions under paragraph (1) is released from such restriction under Article 8 (1), the Financial Supervisory Service shall cancel the designation as being subject to restriction of electronic financial transactions and notify financial companies and the account holder thereof.
Article 13-3(Cessation of Use of Telephone Number Exploited for Telecommunications-based Financial Fraud) #
(1) When the Prosecutor General, the Commissioner General of the National Police Agency, or the FSS Governor ascertains a telephone number exploited for telecommunications-based financial fraud, he/she may request the Minister of Science and ICT to cease provision of telecommunications service for the relevant telephone number. <Amended on Jul. 26, 2017>
(2) The user of the telephone number for which provision of telecommunication service is ceased upon request referred to paragraph (1) may file an objection with the agency that has requested the cessation.
(3) Matters necessary for the procedures, etc. regarding raising of an objection under paragraph (2) shall be prescribed by Presidential Decree.
[This Article Newly Inserted on Jan. 27, 2016]
Article 14(Fees) #
The FSS Governor may collect a fee from a victim who has been paid a refund for loss, as prescribed by Presidential Decree.
Article 14-2(Payment of Bounty) #
(1) The Financial Services Commission may have the FSS Governor pay monetary rewards to persons that have reported situations suspected as the account exploited for fraud in telecommunications-based financial fraud to investigative agencies, the Financial Supervisory Service, etc. within budgetary limits.
(2) Matters necessary for the scope of persons eligible for payment of monetary rewards referred to in paragraph (1), criteria and procedure for payment of monetary rewards, etc. shall be determined and published by the Financial Services Commission.
[This Article Newly Inserted on Jan. 28, 2014]
Article 15(Special Cases concerning Provision of Account Information) #
(1) Notwithstanding Article 4 of the Act on Real Name Financial Transactions and Confidentiality, a financial company and the Financial Supervisory Service may request, provide, or publicly announce necessary information pursuant to Articles 3 (4), 4 (2), 5 (1) and (2), 6 (3) through (5), 7 (2), 8 (3), 9 (2), 10 (3), 13-2 (2) and (3), and 16. <Amended on Jan. 28, 2014; Mar. 13, 2018; May 16, 2023>
(2) The FSS Governor may request the Minister of the Interior and Safety to provide resident registration records under the Resident Registration Act for notification pursuant to Articles 5 (3), 9 (1), 10 (1), and 13-2 (2). In such case, the Minister of the Interior and Safety shall comply with the request except in extenuating circumstances. <Newly Inserted on Mar. 13, 2018>
(3) Notwithstanding Article 4 of the Act on Real Name Financial Transactions and Confidentiality, Articles 32 and 33 of the Credit Information Use and Protection Act, and Article 26 of the Electronic Financial Transactions Act, financial companies and electronic financial business entities defined in subparagraph 4 of Article 2 of the Electronic Financial Transactions Act, which are prescribed by Presidential Decree, shall share information on accounts exploited for fraudulent telecommunications-related financial fraud and accounts expected for transactions of injury, as prescribed by Presidential Decree. <Newly Inserted on Feb. 27, 2024>
Article 15-2(Penalty Provisions) #
(1) Any person who commits telecommunications-based financial fraud shall be punished by imprisonment with labor for a limited term of at least one year or by a fine equivalent to at least three but not more than five times the criminal proceeds or both punishments may be imposed concurrently: <Amended on May 16, 2023>
(2) Each person, who attempts to commit a crime provided for in paragraph (1), shall be punished.
(3) Any person who habitually commits offenses referred to in paragraph (1) shall be punished by aggravating the punishment for the offense up to 1/2 of the existing punishment thereon.
[This Article Newly Inserted on Jan. 28, 2014]
Article 16(Penalty Provisions) #
Any of the following persons shall be punished by imprisonment with labor for up to three years or by a fine not exceeding 30 million won: <Amended on May 16, 2023>
1. A person who applies for the remedy for loss under Article 3 (1) by fraud;
2. A person who requests the suspension of payment under Article 3 (4) by fraud;
3. A person who applies for the remedy for loss under Article 6 (1) by fraud;
4. A person who raises an objection under Article 7 (1) by fraud.
Article 17(Joint Penalty Provisions) #
If the representative of a corporation or an agent or employee of, or other person employed by, the corporation or individual commits any violations set forth in Article 15-2 or 16 in conducting the business affairs of the corporation or individual, the corporation or individual shall, in addition to punishing the violator accordingly, be subject to a fine prescribed under the relevant provisions: Provided, That the same shall not apply where the corporation or individual has not been negligent in exercising due care and supervision concerning the relevant business affairs to prevent such violations. <Amended on Jan. 28, 2014>
Article 18(Administrative Fine) #
(1) Any of the following persons shall be subject to an administrative fine not exceeding 10 million won: <Amended on Jan. 28, 2014; May 16, 2023; Feb. 27, 2024>
1. A financial company that fails to submit or perform an improvement plan referred to in Article 2-2 (2);
2. A financial company that fails to take the measure for identification, in violation of Article 2-4 (1);
2-2. A finance company that fails to preserve the details of notification or cancellation of an interim measure or measures for identification regarding temporary measures by means of writing, recording, etc., in violation of Article 2-5 (4);
2-3. A finance company that fails to verify the purpose of customer's financial transactions, in violation of Article 2-6 (1);
3. A financial company that fails to take measures, such as the suspension of payments, in violation of Article 4 (1) 1 or 2;
4. A financial company that fails to request public announcement of the commencement of the procedure for extinguishment of claims, in violation of Article 5 (1) or 6 (3);
5. A financial company that fails to terminate the suspension of payments and the procedure for extinguishment of claims, in violation of Article 8 (1);
6. A financial company that fails to pay a victim a compensation for loss, in violation of Article 10 (1);
7. A financial company that settles electronic financial transactions in violation of Article 13-2 (3).
(2) Any of the following persons shall be subject to an administrative fine not exceeding five million won: <Amended on Jan. 28, 2014; May 16, 2023>
1. A financial company that fails to request the suspension of payments, in violation of Article 3 (4);
2. A financial company that fails to give notice of the relevant measures for suspension of payments in violation of the main clause, with the exception of the subparagraphs, of Article 4 (2) other than its subparagraphs;
3. A financial company that fails to notify a victim of a formal objection by the account holder, in violation of Article 7 (2).
(3) The administrative fine under paragraphs (1) and (2) shall be imposed and collected by the Financial Services Commission as prescribed by Presidential Decree.