Store Owners Who Collected ATM ‘Self-Withdrawal’ Fees Found Guilty of Fraud by Supreme Court

ATM Fee-Sharing Structure With Store Owners
Thousands of 'Self-Withdrawals' Without Real Transactions
Fee Burden Shifted to KakaoBank
Supreme Court: "Constitutes Fraud"

Three store owners who repeatedly withdrew cash using ATMs installed in their businesses to collect commission income have been found guilty of fraud. The Supreme Court ruled that those who exploit commission structures under the pretense of normal customer usage may be subject to criminal penalties.

According to the legal community on March 18, the First Division of the Supreme Court, presided over by Justice Ma Yongju, dismissed the appeal and upheld the original verdict for three store operators, including an individual identified as Park, who were indicted on charges of computer fraud and obstruction of business by fraudulent means.

This case centers on the abuse of a system in which a portion of the fees generated by ATMs installed at stores is distributed to the business operators. For customer acquisition, KakaoBank exempted customers from ATM fees when using check cards, instead paying those fees to the VAN company ATM Plus. ATM Plus then settled a portion of those fees with the location where the ATM was installed.

The defendants exploited this structure. Even though there were no actual customer transactions, they repeatedly withdrew and redeposited cash using check cards they owned, conducting these transactions via the ATM. Over approximately one month, they performed these withdrawals and deposits 8,000 to 10,000 times, thereby earning commission income.

Both the first and second trials found the defendants guilty. The courts determined that the defendants disguised the transactions as normal customer activity, thereby interfering with the work of financial institutions, and that the repeated transactions constituted deception by inducing the payment of commissions as a form of property disposition.

The Supreme Court maintained the same position. The panel stated, "Even if an act is carried out using information processing devices such as computers, if it causes the person making the property disposition to be misled as a result, it constitutes an act of deception." The court further ruled, "This case does not merely involve mechanical processing; since it results in financial institutions paying out commissions, it is sufficient to establish the offense of fraud."

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