Investigators from the Civil Affairs Judicial Police Bureau deployed until February
Intensive crackdown on illegal lending targeting market merchants
Proactive response strengthened with traditional market merchant associations
Seoul City will intensively crack down on illegal lending activities around traditional markets in celebration of the Seollal holiday. Strong measures such as business suspension, in addition to criminal charges, will be taken against the identified illegal companies.
Seoul City announced on the 14th that it expects illegal lending activities to run rampant targeting merchants who need short-term urgent funds before and after Seollal, and will conduct intensive crackdowns and investigations on illegal lending activities until the end of February.
Due to the record-breaking heatwave, the prices of tangerines and strawberries, which are commonly enjoyed in winter, have risen by more than 10% compared to last year. On the 20th, Kyungdong Market in Dongdaemun-gu, Seoul, showed a quiet scene. According to the Korea Agro-Fisheries & Food Trade Corporation (aT), the average retail price of tangerines (open field) is 4,265 won for 10 pieces, 18% higher than a year ago, and the average retail price of strawberries is 2,532 won per 100g, 14% higher than a year ago and 24% higher than the average year. Photo by Kang Jin-hyung
The investigation targets include ▲illegal high-interest daily loans (annual interest rate exceeding 20%) ▲lending operations by unregistered lending companies ▲lending advertisements through street business cards and online. Seoul City explained that in some cases, the loan handling fee and interest are deducted in advance during the loan process, and only the remaining amount is paid as the loan principal. The loan handling fee is also considered interest, and when converted to an annual interest rate, most cases exceed the legal interest rate of 20%, making them illegal.
Accordingly, since the distribution of business card-type flyers by unregistered lending companies itself constitutes illegal lending advertisements, the 'Dapo Killer System' will be operated continuously to focus investigative efforts on illegal lending advertisements and securing lenders using burner phones. To enhance the effectiveness of damage prevention and crackdowns and investigations, close cooperation with traditional market merchant associations and others will be maximized. In addition, 20,000 copies of the 'Illegal Private Finance Damage Report Guide' will be produced and distributed to merchants through traditional market merchant associations, and daily 1 to 2 broadcasts of 'Damage Prevention and Reporting Guidance' will be conducted in cooperation with the merchant associations.
Seoul City decided to file criminal charges against registered lending companies caught charging interest rates exceeding the legal limit, unregistered lending companies’ lending activities, or lending advertisement activities. Violations of loan contract entries by registered lending companies will be reported to each district office, which will impose administrative measures such as fines and business suspension on the relevant companies.
Choi Won-seok, Director of the Seoul City Civil Affairs Judicial Police Bureau, said, "Illegal private finance is a criminal act that exploits economically vulnerable citizens," and added, "We will do our best to eradicate illegal lending activities such as charging high-interest rates and unregistered lending."
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