Seoul City Conducts Intensive Crackdown on 'Illegal Private Loans' with Pan-Government Task Force

Focused Crackdown on Illegal Collection of High-Interest Rates and Loan Fees

[Asia Economy Reporter Jo In-kyung] The Seoul Metropolitan Government's Civil Life Judicial Police Unit and the Labor and Civil Life Policy Office announced on the 30th that, as part of the government-wide 'Illegal Private Loan Eradication Measures' to be promoted until the end of the year, they will receive consultations and reports on damages caused by illegal private loans, such as high-interest rate charges.

Since the outbreak of the novel coronavirus disease (COVID-19), they have been conducting intensive inspections and investigations into illegal acts that increase economic burdens and suffering, such as charging high interest rates and collecting illegal loan (brokerage) fees targeting financially vulnerable groups in need of urgent funds during difficult times. Strict measures will be taken against any illegal activities detected.

Illegal private loan operations mostly conduct loan agreements and repayments through non-face-to-face methods such as phone calls and text messages, and use burner phones and bank accounts to conceal the identity of loan operators, making active reporting by citizens essential. Therefore, the Seoul Metropolitan Government urged citizens who have suffered damages from illegal private loans to report their cases through the damage report centers where in-person and phone consultations and damage registrations are possible, or online.

In particular, Seoul will operate a 'Visiting Illegal Private Loan Damage Consultation Office' for 25 days from July to September, visiting traditional markets, district offices, community centers, and other sites together with 25 autonomous districts to facilitate consultation and reporting for citizens affected by illegal private loans.

Reports of illegal private loan damages received will be supported through recovery of principal and interest payments exceeding the legal interest rate, mediation agreements, appointment of litigation lawyers as debt representatives, and active support for damage relief measures such as guidance on low-income finance and livelihood self-support fund assistance through information sharing and cooperation with related organizations.

Seo Seong-man, Labor and Civil Life Policy Officer of Seoul, said, "If you need urgent funds and consider using illegal private loans, first consult the Korea Inclusive Finance Agency about support for low-income financial products. Even if funds are inevitably needed, registered loan companies should be used." He added, "If you suffer damages from illegal private loan operators, you should immediately consult or report to the damage report center to prevent further spread of damages and receive relief and support."

Park Jae-yong, Chief of the Seoul Civil Life Judicial Police Unit, said, "In the difficult situation caused by COVID-19, we will focus stronger than ever on crackdowns and investigations against illegal loan activities that increase economic pain and burdens such as high-interest charges targeting financially vulnerable groups, and do our best to help victims recover from damages."

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