Sixty Members of Loan Shark Organization Arrested; Nine Detained
155 Billion Won Lent, 4.8 Billion Won in Illegal Profits
Borrowed 960,000 Won for One Day... Paid 540,000 Won in Interest Alone
Unregistered loan shark organization members who amassed tens of billions of won in illegal profits through usurious lending with annual interest rates up to 20,000% have been arrested in large numbers. Additionally, debt settlement agency officials who received requests from high-interest debtors claiming they would "resolve the issue" and extorted money from lenders by threatening to report them for illegal loan sharking were also apprehended.
On the 10th, the Criminal Mobile Unit of the Northern Gyeonggi Provincial Police Agency announced that they arrested 60 people, including the head and employees of unregistered loan company A and suppliers of forged bank accounts, on charges of organizing a criminal group and violating the Act on Registration of Credit Business and Protection of Finance Users. Among them, nine were detained. They are accused of lending 15.5 billion won to a total of 3,649 people from March 2021 to May 2024 and charging interest exceeding the legal limit, earning a total of 4.8 billion won in illegal profits.
For example, debtor A borrowed 63.23 million won over 12 installments for a total of only 14 days but paid 54.63 million won in interest upon repayment. When annualized, the interest rate reaches 2,803%. Debtor B borrowed 960,000 won for just one day but paid 540,000 won in interest alone, which corresponds to an annual interest rate of 20,531%.
Those previously caught operated the organization systematically with their own code of conduct and hierarchy. Debtors who repaid loans well were managed separately, and re-loans were encouraged until their repayment ability was completely exhausted. The victims were identified as economically vulnerable groups such as housewives, small business owners, and students who could not obtain loans from legitimate financial institutions.
Criminal Organization Relationship Chart. Provided by Gyeonggi Northern Provincial Police Agency=Yonhap News Agency
Officials from debt settlement agencies who extorted excess interest payments from unregistered loan companies like company A were also arrested. The B consulting firm uncovered in this case promoted itself online as "resolving loan sharking damages." When victims consulted them, they calculated the excess interest and contacted the loan companies, threatening to report them for charging interest rates exceeding the legal limit. If the loan companies returned the excess interest, these officials took half or even the entire amount as a commission. A police official explained, "Company A and company B arrested this time are not directly related; they were investigated and arrested through separate channels."
When receiving requests, they temporarily took the victim's mobile phone, claiming it was "necessary for debt resolution," and secretly recorded and stored private videos saved on the device. This was used as leverage for blackmail if problems arose. It was confirmed that there were cases where they secretly re-recorded clients' sexual videos and threatened to send them to their families.
The police arrested five people, including the head of B consulting firm, detaining one. They secured about 3 billion won of criminal proceeds and took pre-indictment seizure measures. The police plan to expand investigations into unregistered loan companies and debt settlement agencies. A police official emphasized, "If loan companies ask for contact information or personal details of family or acquaintances as collateral, you should never comply."
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