'Annual 2281% Interest Rate' District Office Public Employee's 100 Million Won Loan Business... Fined 7 Million Won in Summary Prosecution

An employee of a district office was summarily indicted on charges of illegal lending involving amounts in the range of 100 million won.

According to the legal community on the 26th, the Incheon District Prosecutors' Office recently summarily indicted A, a public employee of a certain district office in Incheon, on charges of violating the Act on Registration of Credit Business and Protection of Finance Users, imposing a fine of 7 million won.

A is accused of lending a total of about 120 million won to businessman B, whom he met through an acquaintance, 38 times from January 2020 to July 2022, and receiving over 11 million won in interest along with the principal.

It was found that A applied interest rates ranging from as low as 30% per annum to as high as 2281%. Unregistered lenders are prohibited from charging interest rates exceeding 20% per annum when lending money.

The police received a complaint from B in November last year and, upon determining that the charges were valid, referred A to the prosecution. B claimed that many others, besides himself, had provided vehicles as collateral and borrowed money from A, suffering from excessive interest, but the investigative authorities did not confirm these facts.

However, A stated, "I have never engaged in illegal lending and cannot admit to the charges," and plans to request a formal trial. A claimed, "B first asked through an acquaintance to borrow money, and I lent several million won multiple times charging only enough to cover fuel costs; I did not engage in illegal lending," adding, "It was merely a personal debt relationship."

He further asserted, "B rather borrowed money and did not repay it, and the vehicle provided as collateral was a rental car," and claimed, "I have filed a fraud complaint against B, and an investigation is currently underway."