Scam victims to get ¥5 billion

About ¥5 billion in frozen bank accounts is likely to be distributed to victims of bank transfer scams after a law to relieve such victims comes into force in June, according to sources.

The Deposit Insurance Corp. of Japan and financial institutions will cooperate and start distributing the ¥5 billion this year, the sources said.

The victims were deceived into transferring money to bank accounts used for fraudulent purposes.

The law, which will go into force June 21, enables victims to receive money swindled by criminal groups without launching lawsuits.

Under the law, Deposit Insurance will post on its Web site such information as the numbers of frozen accounts and their holders' names. Deposit Insurance and financial institutions will take another month or so to confirm victims who had transferred money to those accounts and distribute the amount left in the accounts to the victims in accordance with the amount of swindled money.

Financial institutions such as banks, "shinkin" banks and credit unions are to freeze funds held at bank accounts at the request of scam victims or police.

Swindling money using bank transfer systems has been on the rise in Japan, with the number of cases coming to 17,900 last year involving some ¥25.1 billion.

Under one type of scam, a criminal group will place a telephone call pretending to be a relative, police officer or lawyer and relate a false story, such as the victim's child was involved in a traffic accident, and that out-of-court compensation be paid.

Financial institutions are required to freeze accounts found to be used for criminal activity.

Under the current law, victims have had to file a lawsuit against the account holder and criminal group to get back whatever money was left in the bank account.

Even under the new law, it will be difficult for them to get all of their money back because criminals usually spend the money before the accounts are frozen.