"Even After Checking Actual Transaction Prices and Mortgages, They Were Deceived"
Real Estate Agents Also Confidently Claimed "No Problem"
"Who Would Have Imagined LH Executives Were Involved?"
As the third death related to the Jeonse fraud in Michuhol-gu has occurred, victims of the Jeonse fraud are suffering secondary damage due to indiscriminate slander against them.
On the 20th, a post titled "Victim of the Incheon Michuhol-gu Construction King Jeonse Fraud" was uploaded by a writer who introduced themselves as A on an online community. A, the author, began by saying, "It pains me to write about the prejudice that victims were careless or poorly educated," and added, "I want to talk from the victim's perspective about why someone like me, who graduated from a good university and has a good job, had no choice but to fall for such a fraud."
On the morning of the 20th, the coffin of A (31, female), a victim of jeonse fraud, is being loaded onto a hearse at the funeral hall of Inha University Hospital in Jung-gu, Incheon. [Photo by Yonhap News]
A pointed out, "It was a structure where anyone could fall victim," and criticized, "The Korea Land and Housing Corporation (LH), Michuhol-gu Office, Jung-gu Office, and the Real Estate Agents Association were all complicit."
Specifically, A recalled the period from when they were assigned to Incheon by their company and had to find a house, to when they actually searched for one. A found through the Naver Real Estate website that there were many relatively affordable listings in Michuhol-gu, and visited a real estate agency that had posted Jeonse listings in the 100 million KRW range.
The Jeonse listings met A’s criteria. However, A was concerned that the real estate registration certificate issued by the agent showed a maximum secured claim of 165 million KRW set by a secondary financial institution as a mortgage. Generally, if the sum of 'mortgage (maximum secured claim) + my Jeonse deposit' exceeds 70% of the sale price, it is considered a high risk of so-called "empty Jeonse" (Kkangtong Jeonse).
A said, "I am someone who studied as much as others and have common sense, so I asked if there were any listings without a mortgage." The agent replied, "All listings in Michuhol-gu have mortgages," and added, "Even if it goes to auction, the actual transaction price of this building is around 300 million KRW, so even if an auction starts, you can be sufficiently compensated."
The agent also persuaded A by saying they were insured for 200 million KRW guaranteed by the Real Estate Agents Association, so even if an accident happened, compensation would be sufficient.
"I had no choice but to trust the real estate agent’s confident assurances"
Members of the National Countermeasure Committee for Jeonse Fraud Victims and the Civil Society Countermeasure Committee held a press conference on the 20th near the Presidential Office in Yongsan-gu, Seoul, requesting a meeting with the President regarding measures against jeonse fraud. [Photo by Yonhap News]
When A checked the sale prices provided by the Naver Real Estate website, they confirmed that dozens of identical listings had recently been traded in the mid-to-high 200 million KRW range. After obtaining the registration certificates, A found that all had been purchased by LH, which gave them no choice but to trust the listings.
Before signing the contract, A asked whether it was possible to subscribe to Jeonse deposit insurance, but was told, "It would be difficult to get insurance for listings with mortgages," while the agent boasted, "I am the exclusive agent for this listing and have never had an accident."
A said, "I judged that the market price was at least 250 million KRW, and even if I entered with a Jeonse deposit of 100 million KRW and suffered losses if an auction started, it would be about 10 million KRW, which I thought of as two years’ worth of monthly rent, so I decided to sign the contract."
Insurance compensation from the Real Estate Agents Association is meaningless
At the Jeonse Fraud Eradication Resolution Rally held on the 7th at the Seoul Transportation Hall in Songpa-gu, Seoul, hosted by the Korea Association of Certified Real Estate Agents, attendees are holding up a banner with a message. [Photo by Yonhap News]
A began to suspect something was wrong when they saw a notice posted in the elevator after work in September last year. It stated, "The appraised value by Suhyup Bank has been finalized at 370 million KRW," and "Loan consultation and related guidance will be provided to households wishing to purchase."
Alarmed, A urgently obtained the registration certificate. The house they lived in had a national tax lien that was not visible on the registration certificate at the time of contract. It turned out that the default registration certificate includes "canceled items," but the agent had arbitrarily printed only the "currently valid items," so A had not been aware.
The agent who had confidently assured there was no problem did not answer calls, and the landlord had changed their phone number.
Furthermore, the actual transaction price checked at the time of contract was also fraudulent in case of auction. The price had been inflated by an LH executive in Incheon who bribed to purchase unsold officetels at high prices.
A lamented, "Who could have imagined that all over 60 transactions were deals where an LH executive took bribes to buy at inflated prices?"
The insurance certificate guaranteed by the Real Estate Agents Association had a total compensation limit of only 200 million KRW, but that did not mean every victim would receive 200 million KRW.
A said, "Since my Jeonse deposit was 100 million KRW, I naturally thought I would be compensated up to the insurance limit of 200 million KRW," but added, "That agent committed 300 Jeonse fraud cases, and even if there were 300 victims, the Real Estate Agents Association only guarantees 200 million KRW total. Moreover, the compensation is not divided among victims but given on a first-come, first-served basis."
The house I lived in has already gone to auction, and I have not recovered my 100 million KRW Jeonse deposit
As the government and the savings bank industry have agreed to postpone auctions on houses affected by jeonse fraud, a signboard is displayed in front of the bidding courtroom at Incheon District Court on the morning of the 21st. [Photo by Yonhap News]
Currently, like other victims, A’s house has gone to auction, and they have not recovered their 100 million KRW Jeonse deposit. A said they visited not only Michuhol-gu Office and the Real Estate Agents Association but also the National Assembly member representing Michuhol-gu, making several attempts to contact them, but received no response. Meanwhile, three victims in their 20s and 30s who suffered from the same perpetrator took their own lives.
A lamented that LH, Michuhol-gu Office, the real estate agent involved, and the Real Estate Agents Association were "no different from accomplices." A added, "I barely exceed the income requirements, so I cannot receive support for Jeonse fraud victims. I think it is my own fault and will reflect and live harder," but emphasized, "However, the perpetrators who took the precious lives of three young people should receive appropriate punishment."
Finally, A said that even if they went back to February 2021, before all these incidents happened, they could not guarantee they would not be scammed. They said, "I just laugh now at the criticism of 'Why would someone knowledgeable fall for Jeonse fraud?' But even if I went back, I wouldn’t know what to check to avoid being deceived."
They concluded with a plea: "Some say this is not a matter of life and death, and some say 100 million KRW is not a large sum, but when my family’s livelihood depends on my shoulders, what I lost is not just money but my family’s trust and sacrifice. Please stop blaming the victims and help ensure the perpetrators receive proper punishment."
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