Illegal Private Loan Crackdown Inter-Governmental TF Meeting
Strengthening Surveillance of Illegal Loan Advertisements Using AI
On the 20th, the government held a meeting of the "Intergovernmental Task Force (TF) to Eradicate Illegal Private Loans" and established a policy to thoroughly confiscate illegal profits through special crackdowns, tax and property investigations, and other measures.
According to the Prime Minister's Office on the day, Bang Gi-seon, Director of the Office for Government Policy Coordination, presided over the related meeting held at the Government Complex Seoul and reviewed last year's achievements in cracking down on illegal private loans and the progress of follow-up measures to eradicate illegal private loans.
In his opening remarks, Director Bang pointed out, "As the recent high interest rates and high inflation situation prolong, the behavior of illegal private loans is becoming more malicious by exploiting the desperate circumstances of ordinary citizens and vulnerable groups."
He continued, "There have been cases of brutal high interest rates applied, such as borrowing 200,000 won due to financial hardship and having to repay 40 million won six months later as the interest snowballed. There are also illegal debt collection cases where, under the pretext of reducing interest, naked photos were demanded via Telegram, and when the money was not repaid by the due date, the photos were spread on acquaintances' social networking services (SNS), showing that illegal private loans have reached a level that destroys daily life."
The related agencies attending the meeting shared the recognition that illegal private loan methods are becoming increasingly sophisticated, mainly online, and that it is difficult to crack down, detect, and punish due to the use of burner phones and fake bank accounts, necessitating drastic measures.
Accordingly, the related agencies decided to strengthen management and supervision of acts such as posting illegal loan advertisements impersonating government support online or using them as contact channels for illegal private loan operators.
They plan to strengthen monitoring of illegal advertisements using artificial intelligence (AI) technology and review measures to more quickly and efficiently block illegal loan advertisements and burner phones used in illegal private loans online.
The related ministries and agencies also plan to continue efforts to improve systems, including revising relevant laws and regulations, based on the principle of strictly punishing livelihood predation crimes such as illegal private loans and recovering illegal profits without exception.
Regarding illegal private loan crimes targeting ordinary citizens and vulnerable groups, the government will review raising the prosecution's standards for detention and sentencing, and also prepare measures to strengthen punishment for illegal loan advertisements and illegal private loan activities.
According to the government, recent illegal private loan crimes have become non-face-to-face and online targeting unspecified many, resulting in increased crackdown achievements. The number of arrests increased from 1,179 cases in 2022 to 1,404 cases last year, and the number of people arrested rose from 2,073 to 2,195 during the same period. The number of detentions surged from 22 to 67.
Through nationwide simultaneous tax investigations, source of funds investigations, and property tracking investigations related to illegal private loans conducted on November 30 last year, the government collected 43.1 billion won in additional taxes and fines. Starting from that day, the government plans to begin a second nationwide simultaneous investigation, including illegal private lenders using new methods such as money brokers (jeonju, 錢主) and mobile phone pawn transactions identified in the first investigation.
Director Bang urged the related ministries and agencies, "Please unite once again with the determination to track down and punish illegal private loan crimes so that they can no longer take root in this land and to confiscate illegal profits without exception, and work together to eradicate illegal private loans."
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