Local Love Gift Certificates Also Subject to 'Kkang' Fraud... 141 Cases of Illegal Distribution Detected

48 Cases Increase Compared to Second Half of Last Year
'Jiryuhyeong Gift Certificates' Hold the Largest Share
Plan to Encourage Reduction of Jiryuhyeong Issuance

In the first half of this year, there were 141 cases of fraudulent distribution of so-called gift certificate 'kkang' and local love gift certificates.

The Ministry of the Interior and Safety announced that it conducted a nationwide crackdown on fraudulent distribution of local love gift certificates from May 13 to 31 this year in 190 local governments, resulting in these detections. This is an increase of 48 cases compared to the 93 cases detected in the second half of last year, marking the highest number of fraudulent distribution cases detected in the past four years.

Number of Cases Detected for Fraudulent Distribution of Local Love Gift Certificates, / Data = Ministry of the Interior and Safety

Among the violations, fraudulent receipt and illegal exchange, commonly known as gift certificate 'kkang', accounted for 56 cases, about 39.7%, making it the most frequent. This refers to receiving gift certificates and converting them into cash without selling goods or providing services. Next, 13 cases each were detected for ▲payment refusal ▲discriminatory treatment compared to cash ▲receipt of gift certificates in restricted industries. Compared to the second half of last year, fraudulent receipt and illegal exchange transactions increased significantly from 13 to 56 cases.

By type of gift certificate, paper-type gift certificates accounted for the largest share of fraudulent distribution cases with 102 cases. Card-type had 27 cases, and mobile-type had 12 cases.

Based on the crackdown results, the Ministry of the Interior and Safety took 169 disciplinary actions including cancellation of registration, on-site guidance, and imposition of fines. The number of stores with canceled registration increased by 28 from the previous year to 55. A total of 45.6 million KRW in fines was imposed as financial penalties, and the amount recovered from unfair profits was 209.4 million KRW.

Furthermore, the Ministry plans to promote measures to eradicate fraudulent distribution of local love gift certificates. To reduce the issuance of paper-type gift certificates vulnerable to fraud, it will encourage switching the discount method from 'pre-discount' to 'post cashback' and enhance the abnormal transaction detection system.

Han Soon-gi, Director of the Local Finance and Economy Office at the Ministry of the Interior and Safety, stated, "Recent cases of fraudulent distribution of local love gift certificates have surged," and added, "We will strictly take action according to laws and principles against cases that exploit the purpose of local love gift certificates to obtain unfair profits."