Illegal Private Loan Crime Proceeds Recovery Amount Soars 66% Year-on-Year

Illegal business card-type flyers from loan companies found in a traditional market in Seoul

Last year, the amount of funds seized from illegal private loan companies increased by 66% compared to the previous year. The government has decided to strengthen inter-agency cooperation and expedite detection and crackdowns to eradicate illegal private financing.

On the 25th, the Office for Government Policy Coordination held a meeting of the 'Whole-of-Government Task Force to Eradicate Illegal Private Financing' with government departments including the Financial Services Commission, Ministry of Justice, and National Police Agency, due to concerns over damage to the general public and vulnerable groups caused by economic crimes affecting livelihoods. According to the task force, the number of illegal private financing cases detected (16%) and the number of people apprehended (1%) increased compared to the previous year. The Office for Government Policy Coordination evaluated that by consolidating investigative capabilities nationwide to respond to new and evolving illegal private financing methods, they achieved successful arrests of offenders.

The Financial Supervisory Service's Illegal Private Financing Damage Report Center received about 60,000 damage reports. Among these, 495 cases with specific allegations such as unregistered lending, violation of maximum interest rates, and illegal debt collection were referred for investigation. Additionally, victims of illegal debt collection were supported with debtor representation (4,510 cases), and those in urgent need of funds were provided with low-income financial products (1,892 cases).

To respond swiftly to illegal private financing, the government will improve systems to accelerate the removal of illegal online advertisements and the suspension of phone numbers. There have been criticisms that the response speed to illegal advertisements was slow due to differing roles among the Ministry of Science and ICT, Korea Communications Commission, National Police Agency, and Financial Supervisory Service. Accordingly, the government is considering simplifying the legal violation confirmation process when deleting posts or suspending numbers. Furthermore, crackdowns on online loan brokerage sites, which are major distribution channels exploited for illegal private financing, will be strengthened.

Lee Jung-won, Deputy Minister of the Office for Government Policy Coordination, stated, “Illegal private financing is a serious issue that exploits the desperate situations of ordinary citizens and financially vulnerable groups, threatening not only their property but also their daily lives,” and urged, “Please continue whole-of-government efforts to eradicate illegal private financing.”

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