Bank Must Repay Son's 50 Million Won Mistakenly Closed in Phishing Case

A financial firm must return a customer's deposit after a bank employee mistakenly closed an account held in the son's name while the mother was withdrawing funds under instructions from a voice phishing scammer, South Korea's financial watchdog ruled.

The Financial Dispute Settlement Committee of the Financial Supervisory Service (FSS) said on the 8th that it held a meeting the day and found that a financial firm can bear civil liability if it breached its duty of care by wrongly closing and paying out a deposit held in the name of a family member rather than the customer.

The case began in September 2024, when a woman identified as A visited a branch of the financial firm. At the time, she had opened compound-interest time deposit accounts in her own name and in the names of her son, identified as B, and her daughter, identified as C.

A was deceived by a voice phishing scammer into going to the bank. The scammer told her the money was for a purchase and instructed her to close the account in her own name and withdraw the funds as a check.

A asked an employee at the financial firm to close her own account and issue a check. The problem arose when the employee checked the wrong account. The employee closed the deposit account held in the name of her son, B, transferred the 50 million won in it to A's demand deposit account, withdrew the amount as a check and handed it to her.

Only after returning did A learn that the account closed was her son's, not the one she had asked to close. But because she was still under the scammer's influence, she did not ask the financial firm to correct the error.

The scammer did not stop there. After learning that A still had an account in her own name that had not been closed, the scammer demanded that she withdraw that money as well and hand it over.

A visited the financial firm again, closed the additional account in her name and had a check issued. She realized she had been a victim of voice phishing only after handing the money to the scammer and losing .

A reported the case to police and also filed a complaint with the FSS, arguing that the damage from the phishing scheme had grown because the employee's error had led to the wrongful closing of her son's deposit as well.

FSS Says Deposit Must Be Returned to Son, Unjust Enrichment Claim Against Mother Unlikely

The FSS found that because the financial firm closed B's deposit account and paid the money to his mother, A, without his consent or request, its obligation to return the deposit to B remains in force.

The reasoning is that B was the party to the deposit contract, so the financial firm must return the money to B. The committee therefore concluded that the financial firm should pay B the 50 million won in principal plus an amount equivalent to the interest that would have accrued through the contracted maturity date.

The committee also reviewed whether the financial firm could demand that A return the money as unjust enrichment once it pays B the deposit and interest. It concluded that this too would be difficult.

A had not used or spent the money as her own assets but was holding it in the form of a check. The FSS said it was reasonable to view the voice phishing scammer, not A, as the party that gained an actual benefit.

Through the case, the FSS stressed that financial firms must accurately verify account holders when opening or closing accounts, even for deposits held in the names of family members. Financial firms can bear civil liability if their negligence in the course of business leads to the wrongful closing and payout of another person's deposit, it said.

The settlement takes effect if the financial firm and A and B, who filed for the dispute settlement, accept the proposal within 20 days of receiving it.