Gyeonggi-do Special Judicial Police Crack Down on 'High-Interest Illegal Loan Companies' Exploiting Low-Credit Citizens

[Asia Economy (Suwon) = Reporter Lee Young-gyu] Illegal loan sharks who have been charging high interest rates to vulnerable groups and small business owners who find it difficult to use formal financial institutions have been caught in large numbers.

The Gyeonggi Province Fair Special Investigation Police Unit announced on the 28th that they conducted an intensive investigation into illegal lending activities from January to March and have criminally charged nine people, including the head of the illegal loan organization, Park Mo (35), and his associates.

The special investigation police plan to send all suspects to the prosecution once the investigation is completed.

The loan amount and repayment confirmed during this investigation total 3.5 billion KRW, with about 3,600 victims.

They are accused of forming the so-called "Hwanggeum Daebu-pa" organization from June 2018 to last February, dividing roles among individuals, and conducting illegal lending activities nationwide, including the metropolitan area and Busan, by charging interest rates exceeding the legal limit (24% per annum) in violation of the Loan Business Act.

They divided roles such as "collection," receiving interest and principal payments via bank transfers from debtors; "call," identifying debtor personal information and desired loan amounts and informing field agents; and "field dispatch," agents who deliver the loan funds.

Park, the head of the organization, formed the group with hometown seniors and juniors in their 20s and 30s, assigning individual roles, managing employees, handling funds, and securing fake bank accounts, according to the investigation.

They paid millions of KRW monthly for advertisements on internet loan sites, joined as members of legitimate loan brokerage companies, and lured people in need of money.

The special investigation police stated that they mainly targeted daily wage workers and small business owners with low credit ratings who found it difficult to get loans from formal financial institutions, lending between 200,000 and 1,000,000 KRW per case and charging high interest rates.

Among the detected cases, there was one where 270,000 KRW was lent, and the next day, 500,000 KRW was collected including 230,000 KRW interest, which corresponds to an annual interest rate of 31,000%.

Before lending money, they obtained contact information of the debtor’s family and acquaintances and did not hesitate to threaten them via text messages or phone calls if repayments were delayed.

Kim Young-su, head of the Gyeonggi Province Fair Special Investigation Police Unit, said, "We will work harder to make this year the first year to eradicate illegal high-interest private loans."

This content was produced with the assistance of AI translation services.