FSA & NPA request further strengthening of fraud prevention measures

In recent years, there has been a sharp increase in “SNS-based investment and romance scams,” in which fraudsters gain the trust of others through social media and then defraud them of money under the pretext of investments, etc. In addition, there have been cases of the misuse of corporate accounts, making it urgent to take measures against financial crimes committed through savings accounts. In response to this, the Financial Services Agency, in conjunction with the National Police Agency, requested the following measures to prevent the fraudulent use of savings accounts.

1. Strengthening the prevention of fraudulent use and understanding of the actual situation when opening an account

• Informing customers that account buying and selling is a crime and that financial institutions have a policy of dealing strictly with it.
• Building a system to verify the authenticity of identity documents according to the method of identity verification.
• Researching and analyzing the attributes and trends of customers who are at high risk of account fraud, such as those who have reported suspicious transactions or have been subject to police freeze requests.
• When opening an account with a customer who meets these characteristics, conduct more rigorous checks on the actual situation and purpose of use.
• When allowing a single customer to open multiple accounts, check the purpose of use and continuously monitor usage.

2. Multi-layered detection focusing on the appropriateness of the user’s access environment and the amount and frequency of transactions

• Detecting transactions made from the same terminals and access environments as accounts where fraudulent use has been confirmed.
• Detecting connections that are inconsistent with the customer’s declared information or past access information.
• Detecting transactions that are inconsistent with the actual customer status and the purpose of the account as determined during the account opening review.

3. Enhancing and refining detection scenarios and thresholds focusing on the purpose of the fraud and the method of the crime

• Application of unique scenarios to customers at high risk of account fraud.
• Application of scenarios focusing on deposit/withdrawal and remittance patterns specific to current fraud losses.
• Continuous investigation and analysis of the occurrence of fraudulent use and fraud cases, and flexible review of scenarios and thresholds.

4. Speeding up detection and subsequent measures such as confirmation with customers, and suspending, freezing, and terminating withdrawals

• Early detection of fraudulent transactions by increasing the frequency and immediacy of monitoring depending on the status of fraudulent account use.
• Subdivision of responses and prompt measures depending on the level of suspiciousness of detected transactions ( when fraud can be confirmed)
  - Risk blocking measures (refusal, freezing, suspension of deposits and withdrawals, etc.) when fraud cannot be confirmed
  - Risk reduction measures (temporarily suspending transactions, calling customers to confirm, etc.)
• Clarification of the criteria and decision-making process for imposing transaction restrictions, etc., and necessary confirmation items for customers, etc.
• Restrictions on transaction types, amounts, etc. for a certain period after account opening.
• Establishment of a system that can quickly impose transaction restrictions, etc. even at night and on holidays, depending on the hours of business/service provision and times when fraudulent use is most prevalent.

5. Sharing information between financial institutions that contributes to understanding the origins and actual situation of fraud

• Sharing information between financial institutions on methods of account fraud and case studies, and improving response capabilities

6. Strengthening information provision to and cooperation with the police

• Prompt provision of information to prefectural police when transactions with a high risk of fraud are detected; specific discussions with the National Police Agency and prefectural police to build a collaborative system for this purpose.
• Application of unique scenarios to customers at high risk of account fraud.
• Application of scenarios focusing on deposit/withdrawal and remittance patterns specific to current fraud losses.
• Continuous investigation and analysis of the occurrence of fraudulent use and fraud cases, and flexible review of scenarios and thresholds.
• Responding appropriately to requests for cooperation from prefectural police (filing a report of a crime, providing information that led to the determination of fraud, etc.)

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