Blog, Criminal

You may have seen a lot of internet advertisements looking for someone to sell or rent a bank account. The advertisements guarantee you a high profit but require very little from you. All they want from you is just to use your bank account, still, the name is yours. And it is free to open a bank account. Seems like a very lucrative trade. 

(It is never hard to find advertisements on SNS, Twitter, Google, etc.) 

Be warned, that you must not participate. This is one of the most typical forms of “대포통장(daepo tongjang)” crime. The official translation for the term is not yet publicized, but it could be translated as ”a false bank account” or a “burner bank account.”

How “false bank account” crime works is simple. There must be a criminal who does not want one’s identity to be revealed. The criminal may approach people who need money quickly, then ask them to lend or sell their bank accounts to the criminal. The bank account shall be used to gather money from the victims, usually for voice phishing crimes. The victim, deceived by the criminal, will deposit a large amount of money into your bank account, then the criminal will withdraw it. When the investigation commences, the bank records and receipts will say that “you” are the one who has received the money from the victim. While you are under investigation, the criminal shall run away. You become a smokescreen for the criminal. 

Along with the rise of phishing crimes in South Korea, certain laws have been enacted to prevent and eradicate this false bank account smokescreen from the beginning – That is to criminalize the transactions and rentals of bank accounts. Let’s go over how it is regulated. 

Electronic Financial Transactions Act and its regulations

Electronic Financial Transactions Act

Article 6 (Selection, Use, and Management of Means of Access)

(3) Except as otherwise provided in other statutes, no one shall commit any of the following acts with respect to the use and management of a means of access: Provided, That the same shall not apply to cases (excluding the act referred to in subparagraph 3 and other acts of arranging or brokering such act) where it is necessary to transfer an electronic prepayment means or electronic currency, or to offer it as security under Article 18: <Amended on Dec. 31, 2008; Jan. 20, 2015; Jan. 27, 2016; May 19, 2020>

1. Transferring or taking over a means of access;

2. Borrowing or lending a means of access, or storing, delivering or distributing a means of access, accompanied by receipt, demand or promise of any compensation

3. Borrowing or lending a means of access, or storing, delivering or distributing a means of access, for the purpose of using it for any crime or with the knowledge of the fact that it will be used for any crime;

Article 2 (Definitions)

The terms used in this Act are defined as follows: <Amended on Apr. 27, 2007; Feb. 29, 2008; Mar. 21, 2012; Jun. 1, 2012; May 22, 2013; Jun. 9, 2020>

10. The term “means of access” means any of the following means or information which is used to issue a transaction request in electronic financial transactions or to secure the authenticity and accuracy of users and the details of such transaction:

(a) An electronic card or other electronic information equivalent thereto;

(b) Digital signature generation information under subparagraph 3 of Article 2 of the Digital Signature Act and certificates under subparagraph 6 of the same Article;

(c) A user number registered with a financial company or an electronic financial business entity;

(d) Biological information of users;

(e) A password required to use the means or information referred to in item (a) or (b);

Regarding this issue, Electronic Financial Transactions Act, Article 6, Paragraph 3 stipulates certain behavior as crimes. Subparagraph 1 stipulates “transfer” of bank account and the means of access. “Means of access” are defined in Article 2, subparagraph 10, and this includes electronic cards (also known as “check cards” in Korea), passwords, etc. 

1. Transferring and Taking over

In Article 6, Paragraph 3, Subparagraph 1, transferring a bank account is defined as illegal. This crime is completed regardless of the acknowledgement of a crime or other additional element unlike other Subparagraphs, which will be talked about later. 

This is also related to the South Korean system of the Real-Name Financial System (금융실명제). Because of this system, you must own properties with your real name, and if you do not have the means to prove your identity (and your real name), you cannot make a bank account or own real estate. Thus, it is just illegal to own properties with another name than your own. In this perspective, the transfer of a bank account (and the means to access it) cannot be accepted. Therefore, regardless of the intention or acknowledgement of a crime, transfer itself consists of a crime. Borrowing, Lending, Storing, and Delivering for the purpose of using it for any crime or with the knowledge of the fact that it will be used for any crime

Subparagraph 3 stipulates the “borrowing, lending, storing, and delivering” “for the purpose of using it for any crime” “or with the knowledge of the fact that it will be used for any crime.”

This article is a little tricky, because this requires an additional element, the relationship between any crime or the knowledge of such so. For example, if someone borrows a bank account from the other for the purpose of a crime, then the borrower shall be punished. Then, what about the lender? If the lender had the knowledge of the fact that it will be used for any crime, then the lender shall also be punished. As the law stipulates, “compensation” is not required. If you knew, then even if you had not received any compensation, you shall be considered as an “assistant” of a crime.

2. Borrowing, Lending, Storing, Delivering, or Distributing

A means of access, accompanied by receipt, demand or promise of any compensation

Subparagraph 2 stipulates the same behaviors as crime, while “the purpose of a crime” is not required, but “the compensation” is required. This could be more dangerous for the common people who do not know the regulations very well. 

For example, suppose your friend asks you to do a “favor.” It is just to hand over some “stuff,” and your friend will pay you some money. The “stuff” must be the means of access to a bank account, and your friend “promised” you a certain “compensation.” If you get caught, you become a criminal. When compensation is involved, it has the effect of being considered as if you knew that it was going to be used as a crime. 

Conclusion

Transfer, taking over	Always consists of a crime
Borrowing, lending, storing, delivering	Compensation involved	Crime
If you knew it was going to be used for a crime	Crime

In a nutshell, do not get involved in transactions of the bank account itself. The only case when you could be justified is 1) when no compensation involved 2) plus, you were innocent that your bank account shall be used for a crime. However, as the Criminal Laws of South Korea acknowledge “willful negligence,” therefore it would not be easy to defend. 

Seoul Law Group has various cases dealing with voice phishing and false bank account problems. Be warned and not get tricked, but once you are involved, please do not hesitate to contact us. Seoul Law Group is here to help you.