Online secondhand market scams on the rise

The rise in transactions on secondhand market apps in South Korea, such as Karrot and Joonggonara, has led to a sharp increase in fraud cases, police data showed on Tuesday.

According to data from the National Police Agency released by Rep. Yang-Bu-nam of the main opposition Democratic Party of Korea, 81,252 cases of secondhand transaction fraud were reported between January and October. With an average of 8,000 reported cases per month, the total is expected to approach 100,000 by year’s end, which is the highest in four years.

The number of fraud cases recorded in 2020 was 123,168, dropping to 84,107 in 2021 and 79,052 in 2022. Last year, the figure came to 78,320 cases.

The scale of fraud is also on the rise. Last year, Karrot reported 64 million transactions worth approximately 5.1 trillion won ($3.63 billion). High-value items such as luxury watches, cars, apartments and gift certificates are increasingly being traded on the platform, raising the stakes for scam.

The expansion of Karrot's offerings appeared to contribute to a significant increase in fraud losses. According to Rep. Kim Byung-ki of the Democratic Party at the parliamentary audit in October, the top 10 fraud cases on Karrot totaled 1.85 billion won this year. The largest single case involved real estate fraud, which resulted in losses of 951 million won.

South Korea’s secondhand trading market has seen explosive growth, rising from 4 trillion won in 2008 to 35 trillion won last year, according to the Korea Internet & Security Agency. The market is projected to reach 43 trillion won by next year.