North Korean leader Kim Jong-un's younger sister Kim Yo-jong is seen with a mobile phone in this undated file photo. With over 600,000 mobile phone users, phone scams are spreading across the North. / Yonhap

By Yi Whan-woo

With over 600,000 mobile phone users, phone scams are spreading in North Korea.

The scammers, according to former North Korean defectors in Seoul, are targeting the new class of wealthy merchants who live in major cities or commercial districts.

Their techniques are not as sophisticated as those used in the South, where many criminals pretend to be law enforcers or financial supervisors who request victims to wire cash immediately to avoid further losses from cyberattacks.

The targets in the North are asked to hand over bulk cash after receiving calls from criminals who impersonate officials from powerful government organizations and threaten to arrest them if they don't pay up.

Such classic scams still work because victims do not dare question the identity of the purported government officials, according to experts. Moreover, they have limited access to information and therefore have difficulty finding out whether the criminals are actually from the government bodies they say they are.

"The scammers impersonate officials from the ruling Workers' Party, State Security Department and the Ministry of People's Security," said An Chan-il, head of the World Institute for North Korea Studies. "And this is similar to the South where criminals say they are from the police, the prosecution, tax office or the Financial Supervisory Service. But the chances are higher that North Koreans are fooled more easily than people in the South."

Kim Heung-kwang, founder of the dissidents' group North Korea Intellectuals Solidarity, said fraud using online banking is impossible in the North because there is no commercial banking system.

"This is why they take cash from the victims who store money privately and deliver it to the scammers," Kim said.

The loss in each case, converted to dollars, varies from $380 to $630.

"The amount may not sound too much in the South but it's totally different in the North," said Kang Myung-do, a defector who was a son-in-law of late North Korean Prime Minister Kang Song-san.

The victims are mostly in Pyongsong, but scam cases also have been reported in Pyongyang and other major cities.

Pyongsong is 32 kilometers northeast of Pyongyang, in South Pyongan Province, home to Okjon Market. The market is the largest producer of clothing in North Korea and comparable to Namdaemun and Dongdaemun markets.

The defectors said phone scams are spreading because punishment is merely a slap on the wrist.

"The criminals get away easily because investigation is not very thorough," Kang said. "And even if they are caught, they are only fined, meaning they can repeat the crimes over and over as long as they can afford the money."