Rampant Debt Collection Scams Targeting Ordinary People... Illegal Private Loan Complaints and Reports Increase Amid COVID-19 Pandemic

Consultations and Reports on High Interest Rates and Debt Collection from January to April
Up 56.9% Compared to the Same Period Last Year

[Asia Economy Reporter Kim Hyo-jin] This year, consultations and reports of illegal private loan damages have significantly increased. This is interpreted as meaning that many low-income people are being pushed to the "financial brink" due to difficulties in securing funds amid the aftermath of the novel coronavirus disease (COVID-19).

According to the Financial Supervisory Service (FSS) on the 6th, the total number of consultations and reports received by the FSS Illegal Private Loan Damage Report Center from January to April was 43,127, an 18.8% increase compared to the same period last year. This figure includes simple consultations as well as consultations and reports related to fraudulent fundraising and voice phishing.

Among these, consultations and reports related to high interest rates, illegal debt collection, unregistered lending, illegal brokerage fees, and illegal loan advertisements amounted to 2,313 cases, a 56.9% increase compared to the same period last year.

The FSS urged people to verify whether the financial company is officially registered when taking out loans or making investments. This can be checked on the FSS website under 'Regulated Financial Company Inquiry / Integrated Inquiry of Registered Lending Companies.'

When dealing with lending companies, it is necessary to thoroughly manage contracts, principal and interest repayment statements, and recordings to prepare for damage relief.

If you need low-income financial loans, it is recommended to check and use the appropriate financial support system on the FSS website under 'Low-Income Finance 1332' according to your situation.

According to the '2019 Illegal Private Loan Damage Report Center (hereafter Report Center) Operation Performance' data released by the FSS on the same day, the total consultations and reports last year were 115,622, a 7.6% decrease compared to the previous year.

Simple consultations were the most at 77,700 cases, followed by consultations and reports related to voice phishing (32,454 cases) and unregistered lending (2,464 cases).

Consultations and reports related to unregistered lending and debt collection (402 cases) decreased by 17% and 29.3%, respectively, but consultations and reports related to violations of the maximum interest rate increased by 9.8% to 569 cases due to the gradual lowering of the legal interest rate ceiling.

While consultations and reports related to voice phishing using phone calls decreased, consultations and reports related to smishing via text messages surged to 3,461 cases, a 249.6% increase from the previous year.

The FSS referred 214 cases with criminal suspicion out of 5,468 consultations and reports related to illegal private loans and fraudulent fundraising to the prosecution and police for investigation.

Among the 32,454 consultations and reports received for voice phishing fraud, 1,416 cases were subject to account payment suspension or monitoring account registration measures.