Beware of New Financial Scams: 'Pig Butchering' and 'Recovery Scams'

Woori Bank Holds Press Briefing on Financial Fraud Prevention
Strengthening Organization-Wide Financial Fraud Prevention Measures
Woori Bank President Jeong Jinwan: "Block Scammers Before They Get Customers' Money"

“Pig butchering,” in which scammers build a relationship with victims before steering them toward investments, and “recovery scams,” in which scammers approach people who have already lost money to financial fraud and offer to recover their losses, were identified as financial fraud schemes to watch out for.

Jeon Jaehong, head of the Financial Fraud Prevention Division, explains evolving financial fraud tactics and key achievements in preventing losses at a press briefing on financial fraud prevention at Woori Bank headquarters in Jung-gu, Seoul, on the 12th. Woori Bank.

Woori Bank held a press briefing on financial fraud prevention at its headquarters in Jung-gu, Seoul, on October 12, focusing on these schemes.

Pig butchering is a scam in which perpetrators build a relationship with victims through social networking services (SNS) and other channels before urging them to invest. A typical tactic is to encourage a small initial investment and let victims see a profit, thereby building trust. The scammers then persuade victims to invest larger amounts, block withdrawals, and disappear. Variants include investment scams in which the perpetrators pose as investment experts and romance scams in which they feign a romantic relationship.

A recovery scam is a second-stage scam targeting people who have already fallen victim to financial fraud. Criminal organizations obtain victims’ information and approach them while posing as investigators or refund experts. They deceive victims into believing they can recover their losses, then demand money for supposed fees, taxes, or other expenses.

Jeon Jaehong, head of Woori Bank’s Financial Fraud Prevention Division, who gave the presentation that day, is a financial fraud investigation expert who worked as a police officer for 24 years before retiring with the rank of senior superintendent. He led investigations that resulted in the arrest of the leadership and other members of a group that impersonated “Team Leader Kim Miyoung,” a name associated with an early voice phishing scheme, as well as investigations into overseas voice phishing organizations.

Woori Bank is strengthening its financial fraud prevention system at the organizational level. It established a dedicated financial fraud prevention department and recruited Jeon. It has also built cooperative networks with external agencies, including the Gangbuk Police Station and the Anyang Manan Police Station, expanding the basis for joint responses by sharing information on new types of financial fraud.

The bank is also broadening the use of information about suspected financial fraud through collaboration between its fraud detection system (FDS) and anti-money laundering (AML) departments. In one case, during monitoring, the bank noticed that a customer and an associate gave inconsistent explanations about their relationship. After detecting the possibility of fraud, it prevented losses totaling KRW 260 million.

Woori Bank plans to combine generative artificial intelligence (AI) with telecommunications data to respond more quickly to new types of financial fraud. It will use generative AI to analyze emerging fraud schemes and suspicious indicators and support the development of new detection scenarios and policies. The bank plans to launch a new AI monitoring system by November and stabilize it by the end of the year.

In his welcoming remarks, Woori Bank President Jeong Jinwan said, “We will further strengthen our prevention system so that we can detect warning signs before they escalate and block customers’ money from reaching scammers, rather than limiting our efforts to providing relief after losses have occurred.”

This content was produced with the assistance of AI translation services.