Lack of In-Person Checks Sparks Concerns Over Voice Phishing Phone Proliferation

KT has been found to have opened telecommunications services for foreigners without properly verifying their identities, merely requiring a copy of their passport. Telecommunications companies' standard terms and conditions stipulate the obligation to verify identities when providing services to prevent the creation of voice phishing phones, but KT has been engaging in unorthodox business practices to secure subscribers. Political circles are pointing out that the identity verification process for foreigners opening telecommunications lines should be regulated by law rather than left to the discretion of telecom companies.

According to data titled Requirements Related to Foreigner Service Activation in the 5G Standard Terms of the Three Major Mobile Carriers received by Rep. Choi Hyung-doo, People Power Party, of the National Assembly Science and Technology Committee of the Korea Communications Commission from the Korea Media and Communications Commission on the 13th, KT has been recruiting subscribers without identity verification in countries such as Vietnam and Nepal and providing postpaid telecommunications services upon their entry into the country. Typically, foreigners staying for less than 90 days (short-term) can use telecommunications services by purchasing a prepaid USIM, while those who obtain a foreigner registration certificate for long-term stays can use postpaid plans after undergoing procedures such as account opening and credit verification.

However, KT, through local brokerage agencies, has been pre-issuing postpaid USIMs before entry for foreigners holding specific visas (non-specialty employment, study, general training, etc.) who submit only a copy of their passport, without in-person verification. Foreigners who receive postpaid USIMs can immediately use KT's telecommunications services upon entry. Postpaid plans, which can be used for the contract period, are cheaper than prepaid USIMs due to applied discounts. A source from the communications industry said, "It appears KT is engaging in unorthodox business practices to preempt foreign subscribers entering for long-term stays," adding, "To create new demand such as device purchases, they are attracting foreign customers from overseas using simplified sign-up processes and price discounts as bait."

In fact, KT's postpaid plans for foreigners are only available for sign-up overseas before entering the country. Even when foreigners obtain a foreigner registration certificate two to three months after entry, KT processes changes from passport copies to foreigner registration certificate copies without in-person verification. According to Rep. Choi's office, KT has been known to unorthodoxly recruit foreign customers in this manner since the beginning of last year.

The telecommunications industry has raised concerns that KT's unorthodox business practices targeting foreigners could be exploited for the creation of voice phishing phones. For domestic users, identity verification scanners check for forgery, alteration, or copies of resident registration cards and driver's licenses. However, if lines are opened solely based on passport or foreigner registration certificate copies without in-person verification, as KT does, it is impossible to verify forgery or alteration. The number of detected voice phishing phones under foreign names increased over 150-fold from 474 cases in 2019 to 71,416 cases last year. According to the Korean National Police Agency, voice phishing damages reached approximately 800 billion Korean won as of July this year. The projected damage for this year is expected to reach 1.37 trillion Korean won, setting a record high.

Rep. Choi Hyung-doo stated, "As seen in the KT case, regulatory blind spots in identity verification procedures for foreign lines are becoming a mass production channel for voice phishing phones exploited in crimes like voice phishing," and emphasized the need for effective measures such as strengthening standards for required identity verification documents when opening foreigner prepaid and postpaid lines, enhancing fraudulent sign-up prevention systems through foreign ID copy verification solutions and linkage with immigration offices, reinforcing identity authentication procedures when extending postpaid lines and prepaid USIM usage, and regularizing full investigations and monitoring of distribution points with high volumes of foreigner line openings.

In response, a KT official stated, "The postpaid USIM business through passports is an officially approved project by the Ministry of Science and ICT, and since it operates locally, we have no choice but to accept passport copies," adding, "We cross-check by also receiving standard labor contracts or admission permits in addition to passports." However, verifying foreigner identities through 'passport copies' is not stipulated in KT's telecommunications terms and conditions.

Exclusive: KT Opens Foreigner Lines Without Identity Verification