Nationwide Crackdown on 'Local Love Gift Certificate Fraud' Until the 20th of Next Month

Second Crackdown Following March... Administrative and Financial Penalties Imposed if Illegal Distribution Confirmed

[Asia Economy Reporter Lim Cheol-young] The Ministry of the Interior and Safety announced on the 30th that from next month 1st to October 20th, for 20 days, it will conduct a nationwide simultaneous crackdown on the fraudulent distribution of local love gift certificates in cooperation with local governments nationwide and entrusted management companies of local love gift certificates.

This crackdown is the second nationwide simultaneous operation following the first nationwide simultaneous crackdown on fraudulent distribution of local love gift certificates, which was conducted for the first time nationwide from March 16 to March 31.

Local love gift certificates are vouchers issued by local governments and can only be used at small business franchise stores in the respective local governments. Sales have surged since last year to support small business damages caused by COVID-19 and to revitalize the local economy. The total sales amount until August this year reached 15.1 trillion won, an increase of about 176% compared to the sales amount during the same period last year.

The main targets of this nationwide simultaneous crackdown are acts such as creating false franchise stores to receive or exchange gift certificates without providing goods or services, inflating transaction details to receive or exchange gift certificates beyond actual sales, reselling local love gift certificates, or demanding exchanges at franchise stores.

This nationwide simultaneous crackdown will be conducted through collaboration with local governments nationwide and entrusted management companies of local love gift certificates, including the Korea Minting and Security Printing Corporation, KT, Kona I, and banks.

During this simultaneous crackdown period, if clear fraudulent distribution is confirmed, a fine of up to 20 million won will be imposed according to relevant laws, and administrative and financial measures such as recovery of unjust profits and cancellation of franchise registration will be taken. In addition, franchise stores suspected of serious crimes such as large-scale fraudulent distribution will be strictly punished through police investigations.

Meanwhile, during the first nationwide simultaneous crackdown, 112 cases were cracked down on, with 73 franchise registrations canceled, 11 suspended, and 28 corrective orders issued as administrative measures.

Park Jae-min, Director of the Local Finance and Economy Office, said, “We will thoroughly investigate and strictly punish cases of illegal and unfair profits obtained by abusing local love gift certificates introduced to support small businesses and revitalize the local economy.”

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