Gyeonggi Province has uncovered illegal loan sharks who charged exorbitant interest rates of up to 11,680% per annum or visited victims' homes to commit acts of violence when principal and interest repayments were delayed.
The Gyeonggi Province Special Judicial Police Unit for Fairness announced on the 19th that it has booked a total of five suspects, including unregistered lenders who provided large loans and extorted illegal high interest rates, as well as those who advertised unregistered lending businesses, on charges of violating the Loan Business Act.
According to the investigation, unregistered lender Mr. A provided loans to acquaintances he had known since middle and high school and collected interest payments of 10% of the loan principal weekly.
From October 2020 to January of this year, Mr. A lent approximately 740 million KRW to 77 victims over about 667 transactions and received 860 million KRW in repayments, pocketing 120 million KRW (an annual interest rate of 2029.9%).
In particular, the investigation revealed that Mr. A lent 2.5 million KRW and received 3.3 million KRW on the same day, applying an annual interest rate of 11,680%. Mr. A also engaged in illegal debt collection by visiting victims' homes and committing acts of violence when repayments were delayed.
Another unregistered lender, Mr. B, rode a motorcycle around Pocheon City and Namyangju City distributing 39,000 flyers advertising unregistered lending businesses. In March last year, he lent 2.9 million KRW to a victim who came after seeing the flyer and received 3.9 million KRW 65 days later, charging 1 million KRW in interest (an annual rate of 206%).
Unregistered lender Mr. C distributed 78,500 business card-style flyers printed with phrases such as "Same-day instant loan, 24-hour consultation" around Guri City from January to April last year. Mr. D and Mr. E distributed 2,200 similar flyers in the Siheung City area over two months starting July last year.
Kim Gwang-deok, head of the Gyeonggi Province Special Judicial Police Unit for Fairness, emphasized, "Recently, with rising interest rates and difficult economic conditions, the suffering of ordinary and vulnerable people due to illegal lending has intensified. We will continue to thoroughly investigate malicious illegal financial crimes with a zero-tolerance policy."
Since April 2019, Gyeonggi Province has operated a system to block phone numbers advertising illegal lending businesses to prevent damage from illegal loans. To date, it has blocked and suspended the use of over 11,000 phone numbers of illegal lenders.
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