"Requesting Family Contact Information for Loans? Suspect Illegal Debt Collection"

Gangwon Police Department Lieutenant, CBS Radio Interview
"150,000 won grows to 400 million won in three months"
Illegal if exceeding the legal maximum interest rate of 20%

An illegal private loan crime organization that provided small short-term loans to people who had difficulty obtaining loans and then repeatedly threatened them with murderous interest rates of up to 5000% was caught by the police. On the 15th, Lieutenant Lee Jeong-man of the Gangwon Provincial Police Agency's Violent Crime Investigation Unit emphasized, "If a company requests personal information such as family, acquaintances, and contact details during the loan process, you should suspect illegal debt collection."

Earlier, on the 13th, the Gangwon Provincial Police Agency's Violent Crime Investigation Unit announced that they had arrested a total of 123 people, including detaining 10 key members of the organization on charges of joining and operating a criminal organization, threats, and violations of the Loan Business Act.

This organization demanded personal information of family and acquaintances when issuing loans and used this as a means of threat if the money was not repaid by the due date. In an interview with CBS Radio's 'Kim Hyun-jung's News Show' on the same day, Lieutenant Lee explained, "They posted loan advertisements on internet loan sites using loan business registration certificates under other people's names to disguise themselves as legitimate companies. When customers contacted them, there was no actual loan or loan contract; they only received the debtor's basic information and 10 emergency contact numbers of the debtor's family and workplace colleagues via text message."

Lieutenant Lee said, "They requested such information with the purpose of easily collecting money through threats if the loan was not repaid, but from the debtors' perspective, unaware of this, they considered it a normal loan procedure and submitted all the information."

[Image source=Pixabay]

According to Lieutenant Lee, the currently identified number of victims is 131, with damages amounting to 3.7 billion KRW. However, the police estimate that the scale of illegal private loans exceeds 90 billion KRW and believe there are more victims who have not reported the crime.

Lieutenant Lee stated, "There was a person who started the first transaction with 150,000 KRW, and over a period of three months, the number of transactions exceeded 500 times, with the amount swelling to over 300 to 400 million KRW."

He added, "The victims are mainly university students, part-time workers, job seekers, small business owners, or housewives. With the combination of COVID-19 and the era of high interest rates, the loan threshold for the working class and low-income groups was very high. Victims with unstable income probably felt they had no choice but to put out the urgent fire immediately."

To prevent illegal debt collection damage, Lieutenant Lee advised, "If you need a small emergency loan, first check whether you can use the government's minimum credit special guarantee or the policy financial products of the Korea Inclusive Finance Agency."

He continued, "If you have no choice but to use internet non-face-to-face loans, beforehand, access the Financial Supervisory Service or the Financial Consumer Information Portal (FINE) to check whether the lender is registered as a loan business and whether the phone number submitted during registration for advertising matches the actual phone number used. This will help you filter out illegal loan companies."

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