Gyeonggi Special Judicial Police Crack Down on Illegal 'Proxy Purchases and Proxy Payments' Targeting Youths

[Asia Economy (Suwon) = Reporter Lee Young-gyu] Gyeonggi Province has uncovered a large number of offenders who committed illegal high-interest loans with an annual interest rate of 5400% targeting teenagers, along with proxy payment and proxy purchase activities.

Proxy payment refers to the act of lending money to teenagers through social networking services (SNS) to purchase idol-related goods or game items and receiving a service fee (interest) in return.

Proxy purchase refers to the act of buying alcohol or cigarettes on behalf of teenagers who cannot legally purchase them, charging a certain fee for the service.

The Gyeonggi Province Fair Special Judicial Police Unit announced on the 15th that since July, it has formed a special investigation team and monitoring personnel to conduct intensive investigations into illegal proxy payment and proxy purchase advertisements targeting teenagers on SNS, resulting in the identification of 14 offenders, including 11 involved in illegal proxy payments and 3 in proxy purchases.

The special judicial police added that the total loan amount by these offenders reached 700 million KRW, with about 1,600 victims.

Among the major cases uncovered, a 17-year-old A created multiple SNS accounts and was caught conducting illegal high-interest lending targeting teenagers. A advertised with phrases such as "Lowest service fee! #ProxyPayment, first transaction 50,000 KRW, subsequent transactions up to 90,000 KRW," and committed illegal acts through other SNS channels contacted by victims. A collected personal information such as name, age, and student ID, lent between 10,000 and 100,000 KRW, and charged high-interest fees under the names of service fees and late fees. From January last year to September this year, A lent a total of 170 million KRW to about 580 people using this method. Notably, the interest rate A charged reached up to 5475% annually.

B, without registering as a loan business with the competent authority, mainly targeted underage female students on SNS with advertisements like "Proxy payment available. Please message me. First transaction up to 30,000 KRW. No males accepted," and was caught conducting loan activities. B lent 530 million KRW to about 480 people over two years and received interest at an annual rate of up to 2534%. Moreover, when debtors delayed interest payments, B illegally collected debts by posting personal information such as student IDs and contact details on SNS and engaging in verbal abuse and threats via phone and KakaoTalk, leading to arrest.

There were also cases of proxy purchase of harmful substances such as alcohol and cigarettes targeting teenagers.

C, despite having a criminal record for proxy purchase of harmful substances for teenagers in July last year, reopened an SNS account in October of the same year, gained 4,386 followers by April this year, and provided alcohol and cigarettes to teenagers 350 times, collecting 4 million KRW in fees.

D (16 years old), a minor who found it difficult to work part-time due to COVID-19, purchased cigarettes at four nearby convenience stores without ID checks and provided cigarettes to peer teenagers who contacted him through proxy purchase advertisements 10 times, charging fees.

Another minor, E (15 years old), aware that electronic cigarettes could be easily purchased online, used his parents' names to buy electronic cigarettes from sales sites and resold them, committing proxy purchase activities about 120 times before being caught.

Under the current "Act on Registration of Credit Business and Protection of Finance Users," unregistered loan businesses conducting illegal loan activities or loan advertisements face imprisonment of up to 5 years or fines up to 50 million KRW.

If interest exceeding the legal rate is charged, imprisonment of up to 3 years or fines up to 30 million KRW may be imposed. Additionally, under the "Youth Protection Act," providing harmful substances to teenagers through proxy purchase can result in imprisonment of up to 2 years or fines up to 20 million KRW.

Kim Young-soo, head of the Gyeonggi Province Fair Special Judicial Police Unit, emphasized, "Since proxy payment and proxy purchase targeting teenagers are conducted secretly through SNS, it is not easy to crack down on them. Although the loan amounts are small, ranging from 10,000 to 300,000 KRW, failure to repay can lead to secondary harm such as personal information leaks and threats or assaults. We plan to strictly expand investigations with a zero-tolerance policy."

Meanwhile, the province plans to strengthen investigations into proxy payment and proxy purchase activities targeting teenagers through monitoring of increasingly sophisticated and covert online communities. It will also actively utilize the "Illegal Private Finance Damage Report Center" to support teenage victims and receive reports and tips.

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