Rules Change Proposed to Enable Loss Refund from Voice Phishing Scams Involving Virtual Assets

The Financial Services Commission introduced a revision proposal regarding the Enforcement Decree of the Special Act on the Prevention of Loss Caused by Telecommunications-based Financial Fraud and Refund for Loss (“the Act” hereinafter) on July 15.

The use of virtual assets in telecommunications-based financial frauds, such as voice phishing (vishing) scams, has been on the rise recently. However, under the current legal framework, virtual assets are not included as a type of assets qualified for receiving vishing-related damage and loss relief. In this regard, a revision to the Act was approved in March this year to include virtual assets as a type of assets qualified for receiving vishing-related damage and loss relief, and this revision proposal for the Enforcement Decree provides further details as a follow-up to the amended Act.

First, the revised Enforcement Decree will provide specific criteria on the method of loss refund and how the amount of loss refund is calculated.

Unlike money, virtual assets carry different values attached to them, which makes it necessary to establish specific standards on the method of refund for stolen assets. In this regard, if the type of asset that was stolen is money, the refund being made will be in monetary unit. If the type of stolen asset is a virtual asset, the refund being made will be in the same type of virtual asset in the same quantity.

If there is a discrepancy between the type of asset that was stolen in the first place and the type of asset that is shown on the account that was used in the fraudulent activity, the refund being made will be in the form of asset that is shown on the account that was used in the fraudulent activity at the time of the freeze of account taking effect.