The Illusion of Account Freezes: Low Voice Phishing Refund Rates Expose Gaps in the Financial System

Despite the swift freezing of accounts implicated in voice phishing crimes, actual victim refund rates remain strikingly low. This indicates that account freezes alone are insufficient to effectively prevent and remedy voice phishing damage, exposing vulnerabilities across the financial system. The complex flow of criminal funds and a lack of information sharing between financial institutions are identified as key factors contributing to the low refund rates, leaving victims struggling to fully recover their losses despite significant time and expense.

The Limits of Account Freezes: A Cosmetic Response?

Voice phishing crimes transcend simple individual negligence, exploiting structural vulnerabilities within the financial system. While account freezes can contribute to preventing further outflow of criminal funds, they inherently face limitations in tracing and recovering already leaked assets. Criminals employ tactics such as dispersing funds across multiple accounts or converting them into virtual assets to obstruct tracking. Furthermore, financial institutions struggle to map the flow of criminal funds, and information-sharing systems remain inadequate. In this context, account freezes offer limited preventative effects and are difficult to avoid criticism as a cosmetic response that provides no real help to victims.

Causes of Low Refund Rates: Complex Fund Flows and Lack of Information Sharing

The primary reason for the low refund rates is the complex flow of criminal funds. Voice phishing perpetrators utilize mule accounts to move funds through numerous accounts, withdrawing cash or engaging in virtual asset transactions to launder the money. This process complicates fund tracing, further reducing the amount recoverable. Moreover, insufficient information sharing between financial institutions is also a significant issue. Each institution tracks criminal funds based on its own information, but a lack of seamless information exchange hinders the understanding of the overall flow. Information sharing with virtual asset exchanges is particularly lacking.

The Need for Financial System Improvement: Proactive Fund Tracing and Strengthened International Cooperation

To eradicate voice phishing and strengthen victim relief, improvements across the financial system are necessary. First, the fund tracing system must be strengthened, and information sharing between financial institutions must be activated. In particular, information sharing with virtual asset exchanges should be expanded, and technology for tracking virtual assets should be developed to prevent money laundering. Furthermore, efforts should be made to trace and recover criminal funds that have fled abroad through strengthened international cooperation. Victims should be provided with legal support and counseling services to aid in recovery, and education programs to prevent recurrence should be reinforced. Through these multifaceted efforts, we must protect citizens from voice phishing crimes and create a safe financial environment.