From 'Metbugi Ads' to 'Daelip'... Illegal Loan Advertisements Warning

FSS Detected 298,937 Illegal Loan Advertisements Last Year
AI Introduced and Cooperation System Strengthened Amid Surge in Deceptive Ads
Beware of Loan Ads Using Financial Company Names Due to High Risk of Impersonation

[Asia Economy Reporter Song Seung-seop] It has been identified that last year, the financial authorities received or discovered approximately 300,000 illegal loan advertisements. There are concerns that deceptive business practices such as so-called ‘grasshopper-style advertisements’ and ‘Daelip’ are rampant, calling for caution.

According to the financial sector on the 26th, the Financial Supervisory Service (FSS) detected 298,937 cases of illegal loan advertisements last year through business card ads, text messages, internet posts, and more. This is a 24.4% increase (58,649 cases) from 240,288 cases the previous year.

This increase is attributed to the ‘Illegal Financial Advertisement Monitoring System’ which was trial-operated in July last year and then fully launched, along with cooperation with the Korea Internet & Security Agency (KISA). The number of reports from citizen monitoring groups and the general public decreased compared to the previous year due to reduced offline advertisement collection activities amid COVID-19.

The FSS requested related agencies to suspend the use of phone numbers used in illegal loan advertisements and to delete internet posts in accordance with the current Loan Business Act. The number of suspensions requested to the Ministry of Science and ICT was 11,188, a decrease of 2,056 cases (15.5%) compared to 13,244 cases the previous year. The number of posts requested for deletion to the Korea Communications Standards Commission was 5,225, down 2,785 cases (34.8%) from 8,010 cases during the same period.

From Grasshopper-Style Ads to Daelip... Warning on Deceptive Illegal Loan Advertisements

Searching for 'loan' on SNS yielded 1.52 million related posts.

The decrease in the number of requested actions is largely due to the contraction of offline activities, reduced reports, and the evolution of illegal advertisement methods. A representative example is the difficulty in securing evidence due to grasshopper-style advertisements. Grasshopper-style advertisements refer to a method of using posts and phone numbers only for a short period (2-3 weeks) to evade crackdowns. This is a trick exploiting the time it takes for enforcement; when enforcement begins, the number is disconnected or the post is deleted or set to private.

‘Daelip’ is also prevalent mainly on social networking services (SNS). Daelip refers to lending money for purchasing idol goods or game items. It is characterized by emphasizing the low burden of small amounts, usually under 100,000 KRW, and targets mainly teenagers who are vulnerable to financial knowledge and legal matters. It often involves charging exorbitant interest rates exceeding 1000% annual percentage rate under the pretext of late fees and conducting illegal debt collection to receive high-interest payments.

The financial authorities plan to enhance the monitoring system to respond promptly and efficiently to evolving illegal loan advertisements and strengthen cooperation with related agencies. First, the FSS will upgrade the system by introducing artificial intelligence (AI) logic to increase the detection rate of advertisements. To prevent the spread of damage, they will strengthen organic cooperation with the Korea Communications Standards Commission and KISA and shorten the period from detection to enforcement of illegal loan advertisements. They also plan to establish a joint response system with financial companies to prevent damage from impersonation text messages.

Illegal Loan Advertisement Message

The FSS explained that loan advertisements in the name of financial companies are highly likely to be impersonations and should be treated with caution. Phrases such as ‘loans for anyone’ or ‘loans for credit delinquents’ should raise suspicion of illegal loan advertisements. Also, any loan contract exceeding the maximum interest rate is invalid under any circumstances, and if you have suffered damage from an unregistered loan business operator, you can use the free lawyer support system.

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