What Is a Payment Suspension on a Korean Bank Account?

Short answer. It is a freeze a bank must impose, not a choice it makes. Under Article 4(1) of the Special Act on telecommunications-based financial fraud, where one of the listed triggers occurs and the bank, having checked the transaction history, finds grounds to suspect the account was used for fraud, it must immediately suspend payment on the entire account. The account holder is notified under Article 4(2), and Article 7 gives the holder a route to object, with a deadline measured from the public notice.

What Korean law says

Article 4(1): a bank must immediately suspend payment on the whole of an account where, in any of the following cases, checking the transaction history gives grounds to suspect it was used for telecommunications-based financial fraud. The listed cases are: an application for relief by a victim, or a request for suspension under Article 3; information from an investigating agency or the Financial Supervisory Service that the account is suspected; a result under the identity-verification measures for suspicious accounts indicating it is presumed to be a fraud account; receipt of information about a fraud account under Article 15(3); and other cases set by Presidential Decree.

Article 4(2): the bank must notify the account holder, the victim who applied for relief, and the victim notified by the investigating agency, without delay. Where the account holder cannot be located, the bank must publish the fact of the suspension on its website.

Article 7(1): the account holder may raise an objection with the bank to the suspension, to the restriction on electronic financial transactions and to the claim-extinguishment procedure, from the day the measure is taken until two months have passed from the date of the public notice.

Special Act on the Prevention of Loss Caused by Telecommunications-based Financial Fraud and Refund of Loss, Articles 4 and 7. Act No. 21909, in force from 8 September 2026. A further tranche takes effect 1 October 2026.

What usually happens in practice

The situation that catches foreign residents is receiving money, not sending it. Someone transfers funds into your account for what looks like a legitimate reason, a victim reports that transfer, and your entire account is frozen, including salary and rent money that has nothing to do with the payment complained of. Article 4(1) says the whole account, which is why the disruption is so out of proportion to the sum involved.

The mistake people then make is to wait for it to resolve itself. It does not. The objection route in Article 7 has a deadline tied to the public notice, and the claim-extinguishment procedure runs in the background whether or not you engage with it.

What resolves these cases is documentary: showing what the payment was actually for, who sent it and why, and that you had no part in the underlying fraud. That is assembled, not asserted.

What you should do next

Find out which bank imposed the suspension and on what trigger. Ask for the notification.
Note the public notice date. The objection deadline runs from it.
Gather the paperwork behind the incoming payment: contract, invoice, messages, identity of the sender.
Do not open a new account and move on. The procedure continues without you and can extinguish the balance.

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Written and reviewed by Soobin You, Attorney at YUSU Lawfirm. Former prosecutor. Last legal review: 12 September 2026.