Online shoppers may have to be more cautious in sending money though internet-only bank accounts because three fraud cases have been reported in the first week since its launch, according to industry sources, Monday.
Two people, who attempted to buy books through a second-hand goods website, claim they sent their money to a seller using a K bank account, but did not receive the books. Another case involves golf clubs.
Experts point out that K bank, which opened on April 3 as the country’s first internet-only bank, is not liable for the mishaps. But they said K bank needs to come up with ways to deal with such fraudsters who try to exploit the debut of the new business.
“Websites and blogs for trading second-hand goods typically have lists containing suspicious sellers’ bank accounts and mobile phone numbers. There is a website specialized in sharing such information,” an official at a local online security company said.
“But their K bank accounts would not be on the blacklist so they were not screened. It is not the fault of K bank. However, easier account opening means it can become more vulnerable to fraud.”
“The bank is monitoring suspicious cases, but relevant laws prevent financial institutions from suspending payments without warrants or requests from police,” a K bank official said, adding the bank will promptly take due measures when there is a request from police.
K bank lets people open accounts very easily, which might be attractive not only for customers but also for fraudsters.
Unlike other conventional banks, K bank removed several authentication processes, such as submitting documentation.
Clients can open a K bank account in as fast as 10 minutes through its mobile application, faster than the average 30 minutes for traditional banks. Kakao Bank, another internet-only bank scheduled to launch services in June at the earliest, also boasts that its clients can open an account in seven minutes.
Since 2015, the government has been introducing a number of regulations to rein in the increase of borrowed-name accounts. Conventional banks have since required documentation and as a result opening an account became complicated for clients who do not have jobs or sources of revenue.
But K bank clients are allowed to open accounts without submitting documentation with a remittance cap of 1 million won. If they keep more than 10,000 won in the account for more than a month, the cap is lifted.