[Getty Images Bank]
[Getty Images Bank]

A, who runs an electronics supply business, recently received a call from someone identifying himself as B, a civil servant at a city hall. The caller said he needed A to purchase vehicle radios from a wholesale supplier called Company C on the city's behalf, promising to pay A the difference as a commission. Thinking, "He's a government employee — what could go wrong?" A wired the payment to Company C without suspicion.

Days passed, but the promised money never arrived from the city. A called city hall to follow up, only to be told: "We never placed such an order, and there is no employee by that name." It was only then that A realized he had fallen victim to what is now a widely circulating scheme known as a "no-show scam."

No-show scams — in which fraudsters impersonate officials from public institutions such as city halls or universities to request proxy purchases — are surging. The scheme works by pressuring victims to buy goods from a specific business and wire the payment to a designated account, after which the scammer disappears. The government is urging the public to be especially wary of calls from people claiming to be civil servants who propose financial transactions over a personal mobile phone.

According to the Korea Financial Intelligence Unit (KoFIU), an arm of the Financial Services Commission, 1,376 no-show scam cases were reported between the launch of the "suspicious new-type phishing account transaction freeze guideline" on June 30 and Wednesday — accounting for 37 percent of the 4,935 total cases flagged. The guideline requires financial institutions to immediately freeze accounts suspected of involvement not only in voice phishing but also in emerging fraud schemes such as no-show scams, romance scams and investment advisory room fraud.

Banks have applied payment suspension measures to accounts suspected of voice phishing under the Act on Special Cases Concerning the Prevention of Loss Caused by Telecommunications-Based Financial Fraud, but investment advisory room scams, secondhand-goods fraud and romance scams have been harder to address under existing law because they often involve ostensible transactions for goods or services. Financial regulators have decided to make active use of the "interim measures" provision in that law to extend payment suspensions to these newer forms of phishing as well.

A no-show scam — also called a proxy-purchase scam — is a type of emerging phishing crime in which the perpetrator poses as a buyer of goods or services, pressures the victim into procuring materials from a specific business, and then absconds with the payment after directing it to a designated account.

In its early form, the crime typically involved making a restaurant reservation, arranging a proxy purchase of premium wine or spirits, collecting the payment and then simply not showing up — hence the name "no-show scam."

KoFIU analysis shows that more recently, the scheme has frequently involved impersonating public institutions such as local governments, correctional facilities and schools to pressure small-business owners in sectors including electrical equipment supply, retail and food service into making proxy purchases of specific items.

In one documented case, a fraudster posed as a prison employee and approached a catering business, claiming the facility's cafeteria was under renovation and requesting an outside buffet service, then directed the payment to a fictitious food company. In another, someone impersonating a city hall official called a restaurant, claiming a hygiene complaint had been filed against it, and insisted the owner purchase a bacterial testing device from a specific vendor before an upcoming inspection — using the ruse to extract money from the victim.

The government stresses that public institution employees never call on personal mobile phones to solicit contracts or supply orders, and that the public should be especially cautious about any such approach.

"Public institutions never request proxy purchases, nor do they specify a particular vendor for supply orders," a financial authority official said. "Any proxy-purchase request of this kind is 100 percent a no-show scam — it should be refused outright."

Romance scams were the most frequently reported category over the past month, with 1,527 cases filed. In this type of emerging phishing crime, perpetrators assume false identities — often posing as celebrities or professionals — build an emotional bond with the victim and then extract money by demanding payment for various fabricated expenses.

Over periods ranging from a few days to several months, fraudsters cultivate emotional trust with victims through messaging apps and similar platforms, then direct them to wire money to specific accounts under pretexts such as receiving a parcel, covering medical bills or buying airline tickets.

In one recently detected case, a fraudster posed as a 33-year-old person of Korean descent, spent roughly 10 days building an emotional relationship with the victim and then persuaded the victim to invest in an online shopping mall the scammer claimed to be running. A financial authority official said, "When someone with an unusual background approaches you online, you should question whether it is a genuine relationship or a calculated romance scam." The official added that the likelihood of a romance scam is particularly high when the person refuses to meet in person after initial contact and insists on communicating only remotely.

Team-mission scams accounted for 847 cases. In this scheme, fraudsters reach out via messaging apps and offer high returns for completing simple tasks — writing reviews for free trial products, booking movie tickets or watching videos. Once a victim expresses interest, the scammer insists a deposit or investment must be wired before the mission can begin, and then takes the money.

Demanding an upfront payment to participate in a high-paying part-time job or side gig is the hallmark pattern of a team-mission scam — under no circumstances should any money be wired.

KoFIU held a review meeting Friday on the operation of the suspicious new-type phishing account transaction freeze system, which has been in effect since June 30. Participants discussed the system's operational status, major fraud cases by crime type and recommended public responses to prevent consumer harm, as well as difficulties financial institutions have encountered in implementing the transaction freeze procedures and possible improvements.

Ha Ju-sik, KoFIU's director of system operations planning, said, "Analysis of criminal cases shows that harm from typical fraud methods continues to recur, and we must pursue joint efforts to prevent further damage."


hyuk@heraldcorp.com