Shinbokwi to Integrate Telecom Debts as Well... Financial Services Commission and Ministry of Science and ICT Join Forces

Debtor A, who held financial debt of 30 million KRW, recently lost his job and received financial debt adjustment support from the Credit Recovery Committee. However, the separate telecommunications debt of 1 million KRW he had continued to be unpaid due to insufficient income. Since A needed a mobile phone for employment, he ultimately had no choice but to take out a high-interest loan of 2 million KRW from a loan company.

Going forward, plans are being promoted to allow the Credit Recovery Committee to integrate and adjust not only the debtor's financial debt but also telecommunications debt.

The Financial Services Commission announced on the 1st that, in collaboration with the Ministry of Science and ICT, it has decided to promote 'Financial-Telecommunications Integrated Debt Adjustment,' where the Credit Recovery Committee simultaneously adjusts financial and telecommunications debts.

On the 27th, citizens visiting the Jung-gu Central Microfinance Integrated Support Center in Seoul applied for loans from a small living expense loan product offering up to 1 million won with an annual interest rate of up to 15.9%. Photo by Jinhyung Kang aymsdream@

According to the Financial Services Commission, currently, the Credit Recovery Committee cannot directly adjust telecommunications debt except for mobile phone device fees overdue by more than three months (guaranteed debt by Seoul Guarantee Insurance). If a Credit Recovery Committee user who has difficulty repaying telecommunications debt applies to the telecom company, only a five-month installment payment is possible. Other small payment charges are also difficult to adjust directly.

In particular, there have been cases where debtors who received debt adjustment from the Credit Recovery Committee fail to repay financial debt due to the burden of telecommunications debt repayment or resort to illegal private loans to repay telecommunications debt. This has caused limitations in the effect of debt adjustment support for rehabilitation.

Accordingly, the Financial Services Commission and the Ministry of Science and ICT have decided to promote integrated debt adjustment that collectively adjusts financial and telecommunications debts for debtors struggling to repay both simultaneously. Once integrated debt adjustment is implemented, debtors will be able to receive adjustment for financial and telecommunications debts at once through the Credit Recovery Committee, and the debts will be adjusted considering the debtor's assets and income to encourage sincere repayment and rehabilitation.

For financial-telecommunications integrated debt adjustment to take place, the telecommunications industry must join the Credit Recovery Committee's debt adjustment agreement. Regarding this, the telecommunications industry and the Credit Recovery Committee are currently discussing the industry's participation in integrated debt adjustment and related details.

Mobile carriers such as SK Telecom, KT, LG Uplus, and small payment companies like Danal and KG Mobilians plan to join the agreement during the first quarter. An official from the authorities stated, "(After the mobile carriers and others join the agreement) we plan to proceed with related regulation revisions, system preparations, and other preparatory steps to implement integrated debt adjustment in the second quarter."