Legal Consultation and Public Interest Litigation Referral
The prosecution has taken steps to assist victims of illegal loans by providing legal consultations and facilitating public interest lawsuits.
The Crime Proceeds Recovery Team (Chief Prosecutor Kim Ji-young) of the Seoul Western District Prosecutors' Office announced on the 4th that, in cooperation with the Western Branch of the Korea Legal Aid Corporation, they blocked the return of seized cash amounting to 2.2 billion KRW confiscated from unregistered lenders and supported victims of illegal loans.
In October 2022, the prosecution indicted two unregistered lenders who illegally earned approximately 16 billion KRW in profits by charging an annual interest rate of 1000%, far exceeding the legal limit (20% per annum), targeting financially desperate low-income citizens. They also sought confiscation and recovery of the seized 2.2 billion KRW. However, the first trial court dismissed the confiscation and recovery requests, ruling that there was no evidence that the seized assets were obtained through the crime in question, and that the excess interest should be returned to the victims. Subsequently, in the appeal trial held in September this year, the prosecutor’s appeal was also dismissed.
The prosecution judged that if the dismissal of confiscation and recovery is finalized in the Supreme Court, it would be practically impossible to support the restoration of victims’ damages. Therefore, they formed a dedicated team and provided guidance via phone calls over a month to about 1,500 victims who paid excess interest, informing them about preservation measures regarding the seized assets.
Additionally, during direct interviews with about 200 victims, it was identified that further damages were occurring as victims were taking out new loans to repay high-interest loans. The victims were referred to the Western Branch of the Korea Legal Aid Corporation to proceed with legal consultations and public interest lawsuits.
The Western Branch of the Korea Legal Aid Corporation plans to represent 41 victims in filing provisional seizure applications against the lenders’ claims for the return of seized assets and to file lawsuits for the return of unjust enrichment. Furthermore, they will represent an additional 40 victims in public interest lawsuits.
The prosecution stated, "Going forward, the prosecution and the Korea Legal Aid Corporation will continue to cooperate closely to thoroughly confiscate illegal profits of unlawful lenders and do their utmost to ensure that victims’ damages are restored."
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