"Will Repay Instead" Used Car Loan Scams Rampant... Financial Supervisory Service Issues Consumer Alert

[Image source=Yonhap News]

[Asia Economy Reporter Kim Jin-ho] Mr. A recently received a proposal to lend his name to help with a rental car business, promising to repay the installment loan and incidental expenses on his behalf. He was tempted by the offer to provide rental car-related profits monthly and transfer the name after the loan period ended, but it turned out to be a fraudulent scheme to shift a large debt.

The Financial Supervisory Service (FSS) announced on the 11th that it has issued a consumer alert level 'Caution' as such used car loan financial frauds have been increasing recently.

It has been found that 'used car loan financial fraud,' exploiting the opacity of the used car sales market and the vulnerability of car-secured loans, continues to occur. In particular, victims of this financial fraud are rapidly increasing among low-credit borrowers in urgent need of loans, young adults starting their careers, full-time housewives, and naturalized citizens.

The FSS warned that many cases involve inducing used car loans by baiting with profit dividends, then embezzling the loan funds and purchased vehicles, or deceiving victims with promises of low-interest refinancing loans and employment. There were also many cases where false responses were induced to financial companies under the pretext of providing living expenses.

The FSS emphasized that proposals to borrow a name for used car loans should be categorically rejected to prevent used car loan financial fraud. It also urged caution against advertisements claiming that low-interest refinancing loans are possible if a used car loan is taken, as well as side agreements such as providing living expenses.

An FSS official explained, "It is difficult to demand compensation from financial companies for damages caused by used car loan financial fraud," and added, "Special caution is required to avoid falling victim to such fraud."

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