Seoul City to Focus on Receiving Reports of 'Illegal Loan Sharking'... Intensive Relief for High-Interest Rate Victims

From the 21st to the 23rd of next month, unregistered companies, illegal high-interest loans, debt collection, and advertising victims
Focus on counseling and legal support for micro small business owners and vulnerable groups who surged due to COVID-19... High-interest and ultra-short-term loan damage concentrated

[Asia Economy Reporter Lim Cheol-young] The Seoul Metropolitan Government is operating a ‘Concentrated Reporting Period for Illegal Loan Business Damage’ targeting unregistered loan companies, high-interest loans, illegal debt collection, and loan advertisements. For damages reported during this concentrated reporting period, specialized investigators in related fields, Seoul’s Civil Complaints Officer, lawyers, and dispatched staff from the Financial Supervisory Service will provide direct support from consultation to legal remedies including civil and criminal lawsuits.

On the 16th, Seoul announced that it will operate the concentrated reporting period for illegal loan business damage from the 21st to July 23rd, focusing on remedying damages caused by high-interest and ultra-short-term loans incurred by small business owners and vulnerable citizens struggling with livelihood difficulties due to the prolonged COVID-19 pandemic.

Among the total 376 cases reported to the ‘Seoul Illegal Loan Business Damage Counseling Center’ last year, the most common damage type was ‘high-interest and ultra-short-term loans (162 cases, 43.1%).’ Legal consultations (123 cases, 32.7%) and illegal debt collection (54 cases, 14.4%) followed.

The subjects of reporting include operating unregistered loan (brokerage) businesses, violating the legal maximum interest rate (24%) with high-interest loans, illegal debt collection, illegal loan advertisements, and extortion of brokerage fees. When a victim reports, an expert conducts one-on-one consultations to first verify the facts and damage situation, then proposes remedies appropriate to the damage type.

Additionally, considering that most citizens using illegal loan businesses belong to vulnerable groups, Seoul provides free legal support and practical damage relief such as appointing debtor representatives and litigation lawyers when necessary. For cases requiring specialized support, connections are made with government and private organizations such as the Seoul Financial Welfare Counseling Center, Korea Legal Aid Corporation, and the Korea Inclusive Finance Agency.

Seoul emphasized that for loan businesses violating related laws such as illegal high-interest collection or those judged to have serious damage, it will swiftly impose administrative measures such as business suspension and registration cancellation, and strongly respond by immediately requesting investigations.

Park Ju-seon, Seoul’s Fair Economy Officer, stated, “Considering that most citizens using illegal loan businesses are financially vulnerable, we plan to provide practical damage relief including consultations and free legal support such as appointing debtor representatives and litigation lawyers when necessary. Even after the concentrated reporting period, we will minimize consumer damage caused by illegal loans through continuous crackdowns and inspections.”

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