Illegal Private Lending Targeting Low-Credit Individuals
Prepaid SIM Activation, Home Appliance Rentals, and More
Kim, a 23-year-old college student, recently found herself in urgent need of living expenses and searched for small loans online, only to nearly fall victim to a scam. She was almost trapped in the pitfall of an illegal loan scheme known as "mobile phone kkaeng" (illegal loans involving mobile phones). The broker lured her by saying, "If you activate a brand-new mobile phone and hand it over, I will immediately deposit 1 million KRW per device." The broker even provided detailed instructions, such as, "If the mobile carrier calls to verify your identity, give them a false address and device model."
'Durable Loan (a loan to rescue oneself)' targeting low-credit individuals or college students who find it difficult to use formal financial institutions is becoming rampant. Generative AI
So-called "durable loans" (loans to rescue oneself), which target low-credit individuals or college students who have difficulty accessing formal financial institutions, are becoming rampant.
On December 10, a search for keywords such as small loans and mobile phone kkaeng on social networking services (SNS) easily revealed advertisements offering durable loans. Durable loans are illegal private loans that provide cash to those in urgent need by requiring them to activate prepaid SIM cards, purchase mobile phones on installment, or rent home appliances. The borrower purchases goods in their own name and hands them over to the broker, who buys them, allowing the borrower to receive immediate cash.
When contacting a broker on Telegram who claimed to buy prepaid SIM cards for 80,000 KRW each, the broker requested verification of credit information. After sending a screenshot of the credit inquiry page, the broker replied, "You can activate up to three prepaid SIM cards." When asked if this was illegal, the broker reassured, "Who would do this if it was punishable?" and added, "The purchased SIM cards are used for different purposes by each company, but they are mainly used for work, consultation, or promotional purposes."
Conversation with a dealer who buys prepaid SIM cards for 80,000 KRW each via Telegram. Telegram screenshot
However, SIM cards and mobile phones traded in this way are highly likely to be used for criminal activities, and the seller can also be punished. Under the current Telecommunications Business Act, providing one's personal information to others or lending one's name to activate telecommunications services such as SIM cards for others is clearly illegal. Violators may face up to one year in prison or a fine of up to 50 million KRW.
Yeom Heungryeol, Professor Emeritus of Information Security at Soonchunhyang University, emphasized, "Multiple mobile phone SIM cards can be inserted into a SIM box device, which manipulates caller IDs to make overseas calls appear as if they are coming from within the country, and these can be misused. While it may seem like a solution to immediate financial difficulties, this is an act that can be exploited for crimes such as burner phones, and it should never be done."
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