"If You Don't Repay, We'll Spread Nude Synthetic Photos"... Loan Sharks Charging 4000% Interest

Loaned 500 Million Won, Earned 350 Million Won in Interest
Most Victims Are 20s to 30s Early Career Workers
6 Organization Members Arrested, 9 Sent to Prosecution Without Detention

An illegal loan shark gang that lent small loans with an annual interest rate exceeding 4000% and then produced flyers combining the debtor's face with nude photos of others to pressure repayment in case of delinquency was caught by the police.

Most of the victims were young adults in their 20s and 30s just starting their careers, and it was confirmed that teenagers were also included.

Repayment date conversation content. [Photo by Goyang Police Station]

The Intelligence Crime Investigation Team of Goyang Police Station announced on the 12th that they have sent the case to the prosecution, applying charges such as organizing and operating a criminal organization, violation of lending business laws, violation of debt collection laws, and violation of the Special Act on Sexual Violence against 15 members of the illegal loan business, including the 30-year-old ringleader Mr. A. Six of them, including Mr. A, were detained.

They used aliases and set up nine loan business offices in Daegu from November 2021 until recently. They are accused of lending a total of 500 million KRW to 212 victims through internet non-face-to-face small loans ranging from 100,000 to 500,000 KRW, and pocketing 350 million KRW in interest. Collections were conducted on a weekly basis.

The annual interest rate applied by the loan shark gang reached 4000%. If the debtor failed to repay the money, they pressured repayment with verbal abuse and threats. When interest and other payments were overdue, they even engaged in a method called ‘naked debt collection,’ producing flyers that combined the debtor’s face with nude photos of others and threatening to send them to family or acquaintances.

Seized items including burner phones, gold bars, and cash.
[Photo by Goyang Police Station]

They also used burner phones, fake bank accounts, Telegram, and moved their offices every three months to evade police tracking.

The police focused on the fact that Mr. A and others, who had prior records of similar crimes, divided roles as ringleader, managers, and subordinate members, concluding that they organized a structured criminal group. Therefore, all 15 arrested were charged with organizing a criminal organization.

The police also expressed concern that high-interest small loans through the internet are often committed using burner phones and fake accounts, leading to many cases of malicious debt collection methods. They urged people to use loans from the Korea Inclusive Finance Agency, which supports vulnerable groups.

Meanwhile, illegal loan businesses like the one arrested this time refer to loan companies that operate without registration with financial authorities or local governments, known as ‘unregistered businesses.’ The current legal maximum interest rate is 20% per year, but these groups charge hundreds to thousands of percent in interest. They do not hesitate to engage in illegal collection acts such as assault, threats, and late-night visits or calls.

In particular, ‘sexual exploitation debt collection acts,’ where the debtor’s face is combined with obscene materials and threatened to be sent to acquaintances, have frequently occurred recently, becoming a serious issue.