Threats for Unpaid Debt... Illegal Loan Shark Ring Gets Prison for '24,000% Annual Interest'
by Koo Nari
Published 15 Mar.2026 12:18(KST)
Many Victims Required Psychiatric Treatment
Borrowed 300,000 Won, Collected 600,000 Won After 5 Days
A group engaged in illegal private lending, who collected murderous interest rates of up to 24,000% per year-1,200 times the legal interest rate (20% per annum)-has been sentenced to prison.
According to Yonhap News on March 15, Judge Park Dongwook of the Chuncheon District Court’s Criminal Division 3 sentenced A (43) and four other individuals to prison terms ranging from eight months to one year and eight months. They were convicted of violating the Lending Business Act, the Electronic Financial Transactions Act, and the Act on Regulation of Concealment of Criminal Proceeds.
A and his accomplices, without registering as a lending business, entered into loan contracts with victims who contacted them after seeing advertisements for "non-face-to-face quick loans" on loan brokerage websites. They required victims to take photos showing their faces while holding their ID cards and IOUs, and to submit family contact information. If repayment was delayed, they repeatedly contacted and threatened the debtors' family members and workplaces to collect the debt. As a result, many victims suffered severe harm, with several receiving psychiatric treatment and even resigning from their jobs.
In November 2024, they lent out 300,000 won for five days and collected 600,000 won as repayment for principal and interest, effectively extorting an annual interest rate of 7,300%. From then until April of the following year, they collected interest rates ranging from 1,600% to 24,000% in 83 separate transactions. In particular, A, as one of the main perpetrators, together with another ringleader, extorted interest rates of 1,400% to 6,900% in 104 instances.
The defendants argued that since they were registered as a lending business during part of the period in question, their activities did not constitute illegal private lending. However, the court rejected this claim, noting that they did not enter into contracts under the name of a registered lending company and used burner phones and shell accounts in the process of entering into, lending, and repaying the loans.
Judge Park stated, "Not only did they engage in unregistered lending and receive extremely high illegal interest rates, but the criminal acts disguised as financial transactions in this case greatly disrupt financial order and further increase the economic burden on economically vulnerable debtors, causing significant social harm."
However, the court determined that the defendants’ activities did not constitute a "criminal organization" with a sufficiently established system or structure to distinguish them as co-perpetrators acting as a group for the purpose of committing crimes. Therefore, they were found not guilty of the charge of "participation in and activities of a criminal organization."
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