Burner Bank Accounts: Scam Types, Related Crimes, Punishment, and Prevention

Burner Bank Accounts

A burner bank account (daepo tongjang, 대포통장) is an account opened under a third party's stolen identity, meaning the account holder and the actual user are different people.

If you open such an account and then transfer it to someone else or borrow one, you can be punished under the Electronic Financial Transactions Act (전자금융거래법) by up to 5 years of imprisonment or a criminal fine of up to KRW 30 million.

Involvement in Burner-Account Crime

If you become involved in a burner-account crime, not only the person who commits the offense using the account but also the person who lent the account can be punished.

Even if you did not hand over the account with the purpose of creating a burner account, you can still be punished because you passed account-related information to another person, and depending on the crime in which the account was used, you may be recognized as a co-principal and punished if the elements of that crime are met.

Types of Burner-Account Crime

Types of burner-account crime include drug dealing, online direct-transaction fraud, and voice phishing scams.

Common Burner-Account Scam Patterns

The common ways people fall victim to burner-account scams are: buying and selling accounts, high-paying part-time jobs that ask for your personal information, cases where someone offers to create a corporate card under your personal name, and cases where you are induced to open an account in order to get a loan. If any of the above applies, you should suspect a burner-account scam.

Elements of Fraud

The elements of fraud are a deceptive act, a financial benefit, a disposal of property resulting from the mistaken belief, and intent.

How Burner Accounts Are Used

Burner accounts are typically used for money laundering.

This is when the proceeds of a voice phishing scam or other fraud crime are routed through a burner account before being passed on.

In some cases, criminals ask for the password of an opened account and use it as a burner account, while in others they claim that money was transferred to you by mistake and demand that you transfer it back or withdraw it in cash; or they deceive you with a part-time job offer or by claiming that you need to increase your deposit and withdrawal history to raise your loan limit, then have the proceeds of a voice phishing scam deposited and forwarded to another account.

Punishment for Burner Accounts

Punishment for burner accounts includes punishment under the Electronic Financial Transactions Act, as well as punishment under the Criminal Act for fraud, aiding and abetting fraud, and so on; in addition, there is suspension of payments on the account and restrictions on electronic financial transactions, as well as a restriction of one year or more on opening new accounts. Furthermore, depending on the damage caused, you may also bear civil liability for compensation.

How to Prevent Burner-Account Scams

Ways to prevent burner-account scams are as follows.

Financial institutions never request that you transfer funds in exchange for loan approval, so you should avoid any request to transfer money.
Be cautious of loan consultations conducted through KakaoTalk or social media.
Be doubly suspicious of high-paying part-time jobs that ask for your personal information.
If someone says money was transferred to you by mistake and asks you to return it, do not return it directly; instead, report the mistaken transfer to the sending bank and have it returned through the bank.
Never give your ID, passwords, security card, or other personal information to anyone else.
If you suspect your own account is being used as a burner account, immediately request a suspension of payments and report it to your financial institution.
If you learn that your information has been used for a burner account, turn yourself in immediately to eliminate the possibility of being implicated in further crimes.

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