Back To Top

Watchdog vows to stamp out financial ‘evil’ practices

The nation’s top financial watchdog has vowed to root out what it called the “five evil financial practices” including financial fraud.

The other four are illegal private loans, illegal credit collection, forced purchases of financial products and insurance swindling.

“Unless we cut out these financial malpractices right now, (consumers) will continue to feel uneasy about financial transactions and consequently distrust financial services in general,” Seo Tae-jong, senior deputy governor for coordination and insurance at the Financial Supervisory Service, said Wednesday.

Having kicked off a special task force led by Seo, the FSS will consecutively announce a series of detailed plans within this month, according to the official.

The list is to include prevention measures against fake deposit accounts, relief solutions for financial fraud victims, and regulations on high-interest money lenders.

“These financial vices, such as voice phishing and illicit loans, are nothing new but their damaging consequences are worsening every day,” Seo said.

“As we are currently mapping out a fundamental financial reform, it is crucial that we restore the public’s trust (in the financial business).”

To widen the communication channels for financial crime victims, the FSS is to launch a special financial customer center, which will be operated simultaneously with the conventional one-stop financial consulting call center (1332).

It will also add a crime-response section on its website ( and realign its emergency line with the National Police Agency and with major financial organizations including the Korea Federation of Banks.

Whenever there are possibilities that a specific financial crime may spread to a wide group of consumers, the FSS task force is to issue a three-step warning to potential victims.

“We plan to hire retired senior police officers as special advisers as the investigation for financial crimes requires not only professional financial knowledge but also crime-fighting experience,” the deputy governor said.

The civil watchdog, too, will expand from 50 members to 200.

“It is more important to prevent (financial malpractices) than to step up sanctions after the fact,” Seo said.

By Bae Hyun-jung
Korea Herald Youtube