Financial Supervisory Service Launches "On-Site Investigation" into Insurance Agent Ponzi Scheme Allegations

Seoul Yeouido Financial Supervisory Service building. Photo by Younghan Heo younghan@

Recently, insurance agents affiliated with corporate insurance agencies (GA) have been reported to have attracted investments from young people into loan companies, causing Ponzi scheme damages, prompting the Financial Supervisory Service (FSS) to launch an investigation into illegal activities.

The FSS announced on the 23rd that it has begun an on-site inspection of Mirae Asset Financial Services, where the agents are affiliated, to assess the damage to insurance consumers amid suspicions that the agents were involved in illegal activities of the loan companies.

A Ponzi scheme is a type of multi-level financial fraud that recruits new investors by promising returns and pays profits to existing investors using the new investors' funds.

The GA P.S. Fine Service, whose representative of the problematic loan company P.S. Financial is a major shareholder, has been under inspection by the FSS since the incident occurred. P.S. Financial, a loan company located in Gangnam, Seoul, reportedly absconded after mobilizing P.S. Fine Service insurance agents to attract investment funds.

This company used Ponzi scheme tactics, and the FSS believes that some agents of Mirae Asset Financial Services were also involved in attracting investments during this process. Many of the victims who have filed complaints with the FSS so far are known to be young people in their 20s and 30s.

An FSS official stated, "We plan to thoroughly inspect any illegal activities during the insurance sales process of the GA and the connection between insurance sales and illegal acts. Those involved in illegal activities will be strictly subject to legal action, and information on illegal activities such as unauthorized fundraising identified during the on-site inspection will be actively shared with investigative agencies."