Police Agency Issues Warning on 'Naeguje Loan' Involving Handing Over Phones for Cash

Seodaemun-gu, Seoul Police Agency and National Investigation Headquarters exterior view

[Asia Economy Reporter Seongpil Cho] On the 13th, the National Police Agency, together with the Ministry of Science and ICT and the Korea Discount Telecommunications Business Association, urged special caution regarding a variant of illegal private loans known as mobile phone 'Naeguje loans.' 'Naeguje loans' means 'loans to save myself,' referring to illegal private loans where people who urgently need money but cannot get a loan hand over their mobile phones and receive some cash in return. It is also called 'mobile phone loans' or 'mobile phone kkang.'

Loan organizations first promote Naeguje loans through flyers or the internet to recruit victims. When contacted, they deceive victims by assuring no harm will come, open mobile phone accounts under the victims' names, and provide the phones. However, months later, the victims receive bills amounting to millions of won, including communication fees and small payment charges. The debt returned is several times, sometimes dozens of times, the amount of cash the victim received when handing over the phone. Additionally, the mobile phones handed over by victims are misused for other crimes. Ultimately, victims may suffer triple hardships, including criminal punishment.

In fact, at the Gyeongju Police Station in Gyeongbuk, a victim who urgently needed money opened a mobile phone account and received 1 million won but suffered fraud damages of 8.66 million won and was criminally punished for opening a burner phone. Also, at the Cheonan Dongnam Police Station in Chungnam, a victim who opened a prepaid SIM and received 450,000 won in cash was criminally punished for opening a burner SIM.

To raise awareness of these issues, the National Police Agency conducted promotional activities in the first half of this year with the Ministry of Science and ICT and the three major telecommunications companies to highlight the harms of Naeguje loans. In the second half of this year, education to prevent damage is being conducted targeting agency employees. The National Police Agency is expanding crackdowns and distributing explanatory materials to field investigators to help them easily understand Naeguje loans and burner phones. A representative from the National Police Agency’s National Investigation Headquarters stated, "Naeguje loans are a representative illegal private loan that hurts ordinary citizens and small business owners," adding, "We will do our best in prevention, investigation, and recovery of criminal proceeds until all illegal private loans, including Naeguje loans, are eradicated."

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