[News Terms] Public Audit Filed Due to Neglect of Jeonse Fraud Victims

[Asia Economy Reporter Kim Jong-hwa] 'Public Interest Audit' is a system where a person with the right to request an audit can demand an audit on specific matters if the handling of affairs by a public institution (including the duties of public officials belonging to it) is judged to be illegal or improper and harms the public interest.

The eligibility to request is 18 years or older and includes 300 or more citizens, civic groups, etc. When an audit is requested, the Board of Audit and Inspection reviews it and conducts the audit if the necessity is recognized, and must notify the requester of the results. However, matters under investigation or appeal procedures such as lawsuits, trials, administrative appeals, confirmed matters, state secrets or security issues, and pursuit of personal or specific group interests are excluded from the request.

On the 13th, the People's Solidarity for Participatory Democracy filed a public interest audit request against financial authorities and the Ministry of Land, Infrastructure and Transport for neglecting damages caused by jeonse fraud. The photo shows a real estate agency in downtown Seoul.
[Photo by Yonhap News]

On the 13th, People's Solidarity for Participatory Democracy requested a public interest audit against financial authorities, the Ministry of Land, Infrastructure and Transport, and local governments, accusing them of neglecting so-called 'Kkangtong Jeonse' and Jeonse fraud damages. The targets of the public interest audit request are the Financial Services Commission, Financial Supervisory Service, Housing and Urban Guarantee Corporation (HUG), the Ministry of Land, Infrastructure and Transport, and local governments such as Seoul's Gangseo and Gwanak Districts and Incheon's Michuhol District.

People's Solidarity for Participatory Democracy claimed that despite the continuous calls for the necessity of regulating Jeonse loans, the Financial Services Commission and Financial Supervisory Service neglected this, and even though they recognized that some financial institutions had a rapid increase in Jeonse loans, they were negligent in management. HUG was accused of failing to manage closely despite knowing that the guarantee insurance refund system was being abused in the market, as the number of guarantee insurance refunds and the amount of accidents increased.

Regarding the Ministry of Land, Infrastructure and Transport and the recently large-scale Jeonse fraud occurrences in Gangseo, Gwanak, and Michuhol Districts, a public interest audit was requested for reasons such as not properly detecting those who did not subscribe to the mandatory guarantee insurance for landlords.