No Sanctions for Financial Institution Employees Delaying Housing Auctions to Protect Jeonse Fraud Victims

Financial Supervisory Service Issues Non-Action Opinions to Financial Sectors
Temporary Auction Postponement Allowed in Exceptional Cases

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The financial authorities have decided not to sanction the financial institution employee who postponed the auction of a victim's house to protect victims of jeonse fraud.

According to the financial sector on the 25th, the Financial Supervisory Service (FSS) issued a non-action letter on the 19th to the financial industry to ensure that voluntary auction and sale postponement measures by banks and other financial institutions can be implemented promptly. A non-action letter means that although current regulations do not permit the action, it is temporarily allowed under exceptional circumstances.

The FSS issued this rare non-action letter to protect victims by enabling the swift postponement of auctions and sales of houses belonging to victims of jeonse fraud.

Under current regulations, if banks or other financial institutions fail to execute collateral rights such as auctions within the deadline or postpone the execution beyond the allowed period for houses occupied by tenants who are victims of jeonse fraud, they are subject to sanctions for violating regulations.

In response, the FSS interpreted through the non-action letter that financial institutions may postpone the execution of collateral rights on properties notified as jeonse fraud victim real estate for the urgent housing stability and relief of the victims.

The FSS stated in the non-action letter, "Considering the recent increase in jeonse fraud victims and the need to prioritize their urgent housing stability and relief in line with government policy, we took into account the voluntary decisions by financial institutions to postpone the execution of collateral rights."

Based on this, the FSS requested each financial sector association to apply for postponement of sale and extension of sale dates for cases where the sale or auction of houses occupied by jeonse fraud victims in Michuhol-gu, Incheon, was underway.

Of the 59 cases in Michuhol-gu, Incheon, with auction dates on the 20th and 21st, all except 4 cases that were rejected after auction postponement were postponed. On the 24th, all 38 cases with auction dates were rescheduled.

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