"Annual Interest Rate of 3395%, Including Assault and Threats"…Gyeonggi Special Judicial Police Crack Down on 19 Illegal Loan Sharks

[Asia Economy (Suwon) = Reporter Lee Young-gyu] Gyeonggi Province has uncovered 19 illegal loan sharks who applied murderous interest rates of up to 3,395% per annum to collect debts from borrowers or visited their homes to threaten and assault them, causing distress to ordinary citizens.

The Gyeonggi Province Special Judicial Police for Fairness announced on the 12th that from August 29 to September 30, they investigated loan businesses in the province for legal violations and booked 19 suspects with charges.

The special police plan to transfer the case to the prosecution once the investigation is complete. The total loan amount involved was approximately 3.162 billion KRW, with 234 victims reported.

Regarding major violations, suspect A, a registered loan business operator, approached low-credit merchants in the Namyangju area from February last year to September this year, lending money under the pretext of urgent funds and charging interest rates exceeding 30% of the principal. In particular, he used a method of transferring more money than the amount requested by the victims and then receiving the difference back in cash under various fees such as commissions and notarization fees. Using this method, he lent 1.54 billion KRW to 99 victims and charged interest amounting to 660 million KRW with an annual interest rate of up to 3,395%.

Suspect B, an unregistered loan operator, posted advertisements for "corporate emergency loans" on the internet and, after being contacted by small business owners, deducted 25% of the principal as advance interest and various fees, then charged 17% interest on the principal on the 7th day. From January last year to August this year, he lent 1.41 billion KRW to 100 victims and collected interest amounting to 270 million KRW, equivalent to an annual interest rate of up to 290%. When loan repayments were delayed, he illegally collected debts by visiting victims' homes to threaten and assault them.

Suspect C, who operated a clothing store in Anseong City, was caught lending urgent funds to nearby small merchants while charging daily interest rates exceeding 10-20%. From January 2017 to December 2018, he lent 212.33 million KRW to 35 victims and collected interest amounting to 89.18 million KRW, equivalent to an annual interest rate of up to 261%.

The special police used a "mystery shopping" investigation technique (posing as customers) focusing on urban areas where flyer distribution was frequent, and caught 16 people on the spot who indiscriminately distributed illegal advertising flyers throughout Gyeonggi Province.

Kim Min-heon, head of the Gyeonggi Province Special Judicial Police for Fairness, said, "We are conducting investigations into illegal private financing by monitoring internet loan brokerage sites and communities, as well as through reports, tips, and undercover investigations using on-foot investigative techniques," adding, "We plan to strengthen investigations into illegal private financing."

Meanwhile, the province is also operating the "Illegal Private Financing Damage Report Center," a reporting and tip-off reception office to support and assist victims of illegal private financing, including youth victims. When reporting to the Illegal Private Financing Damage Report Center, victims can consult directly with investigators in charge of loan business investigations and receive assistance.

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