Busan Bank Caught Overcharging Loan Interest... Thousands of Cases Refunded

Thousands of Loans Charged Higher Additional Interest Rates Than Allowed by Regulations

BNK Busan Bank was found to have charged higher additional interest rates than regulations allow on thousands of loan cases. The bank explained that this occurred due to differences in the interpretation of regulations, and stated that it proactively refunded both the excess interest and the resulting interest income to customers.

According to financial authorities such as the Financial Supervisory Service on October 29, Busan Bank set the additional interest rates for some credit loan products for public officials and office workers about 0.5 to 1 percentage point higher than stipulated by regulations.

Busan Bank determines the additional interest rate when extending the term of these loans based on the number of loans the customer holds with non-bank institutions such as secondary financial institutions. However, it was revealed that the bank included loans that should have been excluded from the calculation, resulting in higher additional interest rates.

Even if they are non-bank loans, auto installment finance from capital and card companies, student loans, mortgage loans, jeonse deposit loans, and employee loans operated by the financial institution where the customer is employed are excluded from the scope of loans subject to additional interest rates.

The Financial Supervisory Service discovered a large number of similar cases while investigating after customers who used these loans filed related complaints. Following the recommendation from the Financial Supervisory Service, Busan Bank proactively refunded the excess interest and the resulting interest income to eligible customers last month.

The number of loans subject to refund amounts to several thousand, with the total refund reaching several hundred million won. The amount refunded per case ranged from several thousand won to up to several hundred thousand won.

Busan Bank stated that it conducted a comprehensive review for all customers and refunded the interest, and that it has clarified the criteria for applying additional interest rates for secondary financial institutions to strengthen consumer-centered policies.