[Illegal Loan Hotbed SNS] Despite Fake Screening, "10% Refinancing Loan Available"

Request for official registration number met with "difficulty" and disappearance
Changed numbers and deleted posts to operate irregularly
Financial Supervisory Service shortens cooperation cycle with related agencies and advances AI

[Asia Economy Reporter Song Seung-seop] "I'm 26 years old and currently unemployed. I borrowed about 13 million won from a private loan company using my car as collateral. Is it possible for me to get a refinancing loan?"

On the 22nd, when the reporter personally engaged in a fake loan screening via social networking services (SNS), the response was that refinancing loans were available at mid-teens interest rates of around 10%. Soon after, they requested photos of the front side of my ID card, a full transcript of my resident registration, and a three-month transaction statement of my main bank account. When I asked them to provide an official registration number for verification before sending the documents, the loan consultant replied, "That's not possible," and advised me to "get a loan from another consultant."

The targets of illegal loan scammers operating on SNS are financially vulnerable groups such as the unemployed, military veterans, and housewives, who are considered thin-file borrowers (people with insufficient financial history). Since it is difficult for them to borrow money from mainstream financial institutions including commercial banks, they are prone to fall into the trap of illegal loans. Unlike in the past when the focus was mainly on people in their 20s and 30s, the recent increase in SNS usage among middle-aged and older adults calls for special caution.

The reason illegal loans thrive on SNS is due to their 'convenience.' From the scammers' perspective, posting on SNS is cheaper and more efficient than distributing flyers or making individual phone calls to promote loans. Moreover, they can naturally lure customers who are searching for loans on mobile devices through algorithms. Even if a page disappears or a post is deleted, they can simply create a new one and continue their operations.

Flood of Illegal Loan Advertisements... Financial Supervisory Service Shortens Cooperation Cycle and Enhances AI

It is also challenging that financial authorities have no clear way to strongly block these activities in advance. Under current laws, the Financial Supervisory Service (FSS) does not have the authority to delete posts or suspend phone numbers used on the internet and SNS. Post deletions fall under the jurisdiction of the Korea Communications Standards Commission, while phone number suspensions are managed by the Ministry of Science and ICT. Therefore, it inevitably takes time to verify and request actions after receiving reports of illegal loan advertisements.

When the verification process begins to confirm illegal loan ads and request suspension of the numbers used by the accounts, the response often is "My number has been stolen." It is common for the numbers to be changed before any action is taken. There are also tricks such as making posts private and only showing them to certain users. However, indiscriminately deleting posts is difficult, and taking action may provoke backlash and complaints from the companies involved.

Recognizing the seriousness of the issue, financial authorities are preparing measures to respond to these deceptive illegal loan advertisements. To counter illegal operations that change numbers and links rapidly, they plan to shorten the cooperation cycle with the Korea Internet & Security Agency (KISA). They are also upgrading an artificial intelligence (AI) monitoring system, targeted for implementation within this year, to increase the number of detections.

The FSS explains that illegal loan advertisements often use phrases that defy common sense, such as "Anyone can get a loan." In such cases, it is essential to verify whether the lender is a licensed financial institution or a registered loan company. Any contract that exceeds the legal maximum interest rate is invalid. To prevent further damage, illegal loan advertisements should be promptly reported to the FSS, local governments, or the police upon discovery.