Lending Small Amounts and Demanding Service and Late Fees
Investigation of SNS Accounts Advertising Proxy Deposits
Preventive Measures Including Publicity Campaigns with the Seoul Metropolitan Office of Education
Recently, "proxy deposits" targeting teenagers have been rampant on social networking services (SNS), prompting the Seoul Metropolitan Government to launch a focused investigation. Proxy deposits refer to a practice where someone makes a payment on behalf of another person for things like game items, celebrity merchandise, or concert tickets, effectively lending money at extremely high interest rates over a short period.
According to the Seoul Metropolitan Government on October 27, three investigative teams will be assigned to different districts, conducting preventive publicity campaigns, receiving reports, collecting information, and carrying out investigations simultaneously. In particular, the teams will closely track accounts that repeatedly advertise proxy deposits on SNS platforms popular among teenagers, such as Instagram, X (formerly Twitter), and TikTok, in order to identify and investigate illegal lenders.
The Seoul Metropolitan Government considers it illegal lending when a "service fee" of 20 to 30 percent of the principal is demanded for proxy deposits, and a "late fee" of 1,000 to 10,000 won per hour is charged for delayed repayment.
The investigation targets unregistered lenders advertising proxy deposits online, including on SNS, as well as those who impose service and late fees that exceed the legal maximum interest rate. Proxy deposits disguised as proxy purchasing services are also regarded as illegal activity and will be included in the investigation.
The Seoul Metropolitan Government plans to quickly block phone numbers used in illegal advertisements and monitor repeat advertising accounts in real time. The city will also thoroughly protect the personal information of teenage victims to minimize the burden of reporting and carefully manage cases to prevent secondary harm. Teenagers are becoming targets of these crimes due to a lack of financial knowledge, reluctance to report, and fear of exposure, while criminals are exploiting these vulnerabilities and becoming increasingly brazen, perpetuating a vicious cycle.
Preventive publicity activities will also be strengthened. The city will distribute 20,000 informational leaflets to the Seoul Metropolitan Office of Education, high schools in Seoul, and youth centers, and will raise awareness of the dangers of illegal proxy deposits through school bulletin boards and website notices.
Kim Hyunjung, Director of the Seoul Metropolitan Government's Civil Affairs Judicial Police Bureau, said, "Through this focused investigation and publicity campaign, we will minimize harm to teenagers and create an environment where victims can actively report incidents if they occur."
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