The nation’s top financial regulator said Monday it would introduce a new cash withdrawal system later this month as part of efforts to reduce the harm caused by voice phishing.

Starting June 26, cash withdrawals of 3 million won or more from ATM machines will not be possible until at least 10 minutes after the money has been wired to the account, the Financial Supervisory Service said.

“The new system is aimed at buying time for financial authorities to suspend the accounts of voice phishing scammers,” an FSS official said.

In about three-quarters of voice phishing cases, in which criminals pretend to be trustworthy entities in telephone or online communication to obtain personal and financial information or receive money transfers, the money was withdrawn by the swindlers within 10 minutes of being wired.

“Most victims realize they have been duped immediately after wiring the money, but in about 75 percent of the cases, the money was siphoned off within 10 minutes, making it difficult to reduce damages,” the official said.

Whereas more than 90 percent of normal money transfers are of less than 3 million won, 84 percent of transfers made to voice phishing scammers were for 3 million won or more.

The new measure to delay the cash withdrawal will be applied to all financial institutions that handle transactional accounts such as banks, mutual savings banks, the Korea Post, federations of agricultural, fisheries and livestock farm cooperatives, the Korean Federation of Community Credit Cooperatives and some securities companies. 

By Kim So-hyun (sophie@heraldcorp.com)