If you’ve sent money to a phone scammer in Korea, you can ask straight away for the account to be frozen, at your own bank or at the bank holding the scam account (Art. 3(1)). Under the Special Act on Preventing Telecommunications Financial Fraud and Refunding Damaged Assets, once a bank freezes the account the Financial Supervisory Service gives public notice that extinction proceedings have begun, and the account holder’s claim is extinguished two months after the notice date (Art. 9). The FSS then decides refunds within 14 days of extinction and the bank pays without delay (Art. 10). With several victims and too little money, it’s shared in proportion to losses.
1. Victims apply to a bank for a freeze and relief — the bank freezes the whole account at once if there are grounds for suspicion (Arts. 3, 4).
2. Two months from notice → claim extinguished → refund decided within 14 days (Arts. 9, 10).
3. If the balance is short, it’s shared pro rata — balance 20 million, total losses 40 million, your loss 10 million: 5 million won.
Calculator
Updates as you type. If total losses exceed the balance, refund = balance × your loss ÷ total losses (Art. 10(2)1), rounded down (our method). Dates use the same calendar day two months on; weekends and holidays aren’t applied (our sum).
The procedure
| Type | What the source says | Worth noting (ours) |
|---|---|---|
| Art. 3(1) | A victim may apply for a freeze and other relief to the institution holding the account the assets were sent from, or the institution holding the fraud account | Either bank |
| Art. 4(1) | On an application, if transactions give grounds to suspect a fraud account, the institution immediately freezes the whole account | — |
| Art. 5(1) | After a freeze the institution promptly asks the FSS to give notice of extinction proceedings, except where a lawsuit, attachment, tax arrears procedure or pledge came first, or the balance is at or below the Decree amount, among others | Decree: accounts of 10,000 won or less |
| Art. 9(1) | The holder’s claim is extinguished two months after the first notice date | — |
| Art. 10(1), (2) | The FSS decides recipients and amounts within 14 days of extinction and notifies them; the institution pays without delay. If total losses exceed the extinguished amount, extinguished amount × each victim’s loss ÷ total losses; otherwise the loss itself | Pro rata |
Small balances aren’t put up for notice. Act Art. 5(1)6 excepts amounts “at or below a Decree amount of 30,000 won or less”, and Decree Art. 6(2) sets it at 10,000 won or less for accounts (and the converted total for virtual-asset accounts). But if the victim asks the bank to start proceedings within 30 days of being told of the freeze, notice goes ahead.
Three sums — our example
| Case (our example) | Expected refund | Worth noting (our sum) |
|---|---|---|
| Balance 20 million, total losses 40 million, yours 10 million | 5 million won | 20m × 10m ÷ 40m |
| Balance 12 million, total losses 30 million, yours 7 million | 2.8 million won | 12m × 7m ÷ 30m |
| Balance 8 million, you’re the only victim at 3 million | 3 million won | Balance is larger → your loss |
For a notice on 21 October 2026, two months falls on 21 December; treating the claim as extinguished after that day, we put the FSS deadline around 4 January 2027. That’s our sum using the same day two months on, not a strict application of the Civil Act’s period rules (first day excluded, holidays moved). Follow the FSS notice for actual dates.
The Act’s name changed from “damaged funds” to “damaged assets” and it now covers virtual-asset accounts (current text, in force 2 October 2026). Spotting scams is in investment scam red flags.
The bank’s liability — Article 2-4
Institutions must verify identity when a user applies for a loan or cancels savings deposits and similar products, and are liable for losses caused by failing to (Art. 2-4, revised 31 March 2026). If a loan was taken out in your name, this provision is worth a look.
Checklist
- ☐ Apply to the bank for a freeze the moment you realise
- ☐ Report to the police for proof of the loss
- ☐ Told the balance is 10,000 won or less? Ask within 30 days for proceedings
- ☐ Note the FSS notice date — extinction two months later
Questions that remain
What if the refund is less than my loss?
Article 12 deals with how this refund relates to claims for damages; we didn’t go into it.
What if the account holder objects?
Article 7 (objections to freezes) and Article 13 (claims for refund of extinguished claims) deal with that; we checked only their headings.
Sources
- Korean law database (law.go.kr) — Special Act on Preventing Telecommunications Financial Fraud and Refunding Damaged Assets Arts. 2-4, 3, 4, 5, 9, 10 — source (current text, effective 2 October 2026, Act No. 22047; checked 21 October 2026). Identity checks and liability, applications for relief, immediate freezes, notice of extinction proceedings and exceptions, extinction after two months, 14-day decision and pro rata sharing.
- Korean law database — Enforcement Decree Art. 6(2) — source (effective 1 October 2026, Decree No. 36729; checked 21 October 2026). The balance below which notice isn’t required (10,000 won for accounts).
- Not read. The text of Arts. 7, 12 and 13; FSS practice guidance.
- What we added. The “worth noting” column and the Korean everyday gloss.
Where to check further
- Financial Supervisory Service — notices and refund progress.
- Korean National Police Agency — reporting the fraud.
Written on 21 October 2026. The content is from the source; the glosses are ours.
