Financial Supervisory Service, Seoul City, Seoul Metropolitan Police Agency, and Financial Security Institute to Crack Down from the 29th
Focused Crackdown on Illegal Personal Information Sales and Leaks, Illegal Private Loan Company Advertising, False and Exaggerated Advertisements
Strict Measures Against Violations
# Mr. A took out a loan of 100,000 KRW from an illegal lender he met through a loan brokerage platform, agreeing to repay 200,000 KRW after one week. However, unable to repay, he borrowed from other illegal lenders to repay previous loans, causing his total debt to increase to about 6 million KRW across 25 lenders. When he could no longer repay, the illegal lenders threatened Mr. A's acquaintances day and night, forcing him to quit his job. The interest rate on the loan Mr. A received was 5214%, far exceeding the legal maximum interest rate of 20%.
The Financial Supervisory Service (FSS), Seoul Metropolitan Government, Seoul Metropolitan Police Agency, and Financial Security Institute will conduct intensive crackdowns on five online loan brokerage platforms located in Seoul to prevent such damages in advance.
On the 29th, the FSS announced that illegal activities through online loan brokerage platforms are expected to surge ahead of the Lunar New Year holiday, a period of concentrated financial demand. The FSS has continuously inspected online loan brokerage platforms, which are one of the main distribution channels for illegal private loans, in cooperation with local governments, police, and others as part of the government-wide task force (TF) to eradicate illegal private financing.
Through this crackdown, the authorities will focus on checking whether personal information is being sold or leaked without authorization, whether unregistered lenders are conducting illegal advertising, and whether false or exaggerated advertisements are being made on online loan brokerage platforms. They will also verify matters related to loan brokerage business and whether member companies of the loan brokerage platform council are complying with voluntary resolutions.
On the 29th, as the COVID-19 pandemic continues to persist, illegal loan business card-type flyers from private loan companies are scattered across the Insadong street in Jongno-gu, Seoul. Photo by Mun Ho-nam munonam@
The FSS stated that companies found violating regulations during this inspection will face strict measures such as fines and business suspension according to relevant laws, and serious legal violations such as personal information leaks will be referred for investigation. They will respond strongly to eradicate financial crimes affecting the public.
Additionally, the results of the joint inspection will be shared with local governments, and cooperation with local governments and investigative agencies will be continuously strengthened to actively prevent damages caused by illegal private financing and illegal activities by lenders.
Meanwhile, the FSS urged consumers to pay special attention to precautions to prevent damages from illegal private financing and illegal activities by lenders related to the provision of personal information.
Ryu Young-ho, team leader at the FSS, said, "If you leave personal information on loan-related websites of unknown origin, there is a risk of additional damages such as illegal high-interest loans and illegal debt collection, so special caution is required." He added, "Please report illegal activities such as excessive personal information requests, and if you suffer damages from illegal acts such as violations of the legal maximum interest rate or illegal debt collection, secure transaction records and evidence, and actively use the FSS and Korea Legal Aid Corporation’s free support system for debtor representatives and litigation lawyers."
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