[Jeonse Fraud, Aftermath] ① Receiving Psychiatric Treatment, Increasing Legal Fees... Victims' Suffering Is 'Ongoing'

Interview with 6 Jeonse Fraud Victims
"People Are Scary... Habit of Recording Calls"
Receiving Treatment for Depression and Anxiety Disorders
Additional Costs Increase Due to Lawsuits and Auctions

Starting with the so-called 'Villa King' incident in December last year, a tsunami of jeonse fraud swept across South Korea. Numerous victims were unable to recover their jeonse deposits amounting to hundreds of millions of won. Since then, efforts to combat jeonse fraud have continued, including large-scale investigations by prosecutors and police, as well as the enforcement of the Jeonse Fraud Special Act in June. However, there is still a long way to go before the victims of jeonse fraud can recover their losses. Those who have not received their deposits are suffering from both mental and financial damages.

Asia Economy conducted written interviews with six victims of jeonse fraud. All of them responded that they have "not yet recovered their jeonse deposits" and that they "would never choose jeonse again." According to a 'Jeonse Fraud Victim Full Survey' conducted by the Gangseo District Office in Seoul from the 16th to the 30th of last month, among 550 victims (355 respondents), 21.12% (75 people) reported having moved out of their jeonse or monthly rental housing without receiving their deposits back.

"Got into the habit of recording conversations"... Also receiving psychiatric treatment

Ms. Kwak (29, female) went on leave due to severe depression after falling victim to a jeonse fraud of 156 million won this year. Ms. Kwak, who had been living in a house in Hanam-si, Gyeonggi Province since May 2021, contacted the landlord Mr. A in March to terminate the contract but was unable to reach him. Since the termination notice was not delivered, the jeonse contract was implicitly renewed. To understand the situation, she visited the Housing and Urban Guarantee Corporation, consulted banks, and hired a lawyer seeking help. During this process, she discovered that the address listed for Mr. A in the lease contract was a container. Three months later, she heard that Mr. A had been registered as a missing resident. Since then, Ms. Kwak has become fearful of interpersonal relationships and developed a habit of recording conversations. Having not recovered a single penny, she is currently undergoing psychiatric treatment.

According to the Gangseo District Office survey, most victims of jeonse fraud experienced deterioration in mental and physical health. The proportion of respondents who answered "worsened" or "significantly worsened" regarding physical and mental health changes was 89% and 93%, respectively. The percentage who reported "worsened" or "significantly worsened" social relationships was also as high as 65.8%. Ms. Kim (38, female), who lost 310 million won in jeonse deposits, said, "After learning about the fraud, I became angry and unable to sleep, so I have been taking sleeping pills and anxiety medication."

Living at parents' house... "Lost two whole years"

Ms. Cha (36, female), like Ms. Kwak, was defrauded of 120 million won in jeonse on September 29, 2021, by Mr. A. On the moving day when the balance was to be settled, Mr. A disappeared. Although Ms. Cha obtained a fixed date and registered her move-in, she became a subordinate tenant due to the previous tenant's ownership claim, losing her priority rights. She left her packed moving belongings at a container logistics center and ran around trying to recover her deposit but has yet to receive a single penny. Meanwhile, the two-year contract period ended. Ms. Cha's jeonse funds were also her marriage funds. She lived in short-term monthly rent housing and currently lives with her parents. Ms. Cha said, "I ended up bearing the loan principal and interest for a house I never even lived in for a single day."

Ms. Kim (38, female), who was defrauded of 242 million won in jeonse, has also not recovered from the damage since the fraud last March. She said, "Every day feels like a nightmare. Although I am still living there due to ongoing procedures, I will never choose jeonse again."

Costs keep rising despite no deposit recovery

Mr. Lee (35, male) also signed a jeonse contract worth 170 million won in Gwanak-gu, Seoul, but has not recovered his deposit. After a two-year contract and renewal, he only learned of the fraud through another tenant later on. When it rains, water leaks from the ceiling, and the walls are cracked. He requested repairs for defects, but the landlord did not respond.

Mr. Lee is currently pursuing a lawsuit to shorten the jeonse contract period and an auction process. He said, "Continuous expenses are occurring due to the lawsuit and auction proceedings." Ms. Kim, who lost 310 million won, also filed a lawsuit after the fraud at the end of October. She said, "Attorney fees, delivery charges, and future auction costs mean I inevitably have to spend more money." According to data from the Gangseo District Office, excluding attorney fees, the average litigation expenses for victims were 1,612,000 won, and the average attorney fees were 3,793,000 won. This means victims are spending over 5 million won while still having their jeonse deposits withheld.

Recognized as 'victims, etc.' under the Special Act but... "No benefits due to winning housing subscription"

Mr. Im Tae-ho (32, male) renewed a lease contract with landlord Mr. B for 233 million won in June last year on a villa in Suwon-si, Gyeonggi Province, where he had been living since September 2020. He initially signed a jeonse contract for 218 million won with the developer in September 2020, but the ownership was transferred to Mr. B two weeks later. Although he applied for jeonse deposit insurance after the initial contract, the application was rejected. It was only in June this year that he realized he was a victim after seeing the 'List of Jeonse Fraud Landlords' online.

Mr. Im has been recognized as a victim under the Jeonse Fraud Special Act but has not received any support benefits. While living in jeonse housing, he won a housing subscription, which excluded him from government loan products designed to support victims of jeonse fraud. These products are targeted at non-homeowners as heads of households, and ownership of a pre-sale right is considered as owning one home. Mr. Im said, "If I had just received my jeonse deposit, I could have paid the balance for the apartment I won in the subscription. I cannot even get a loan for jeonse fraud victims, so despite winning the subscription, moving in seems difficult."