FSS: "Car Finance Fraud Continues... System Improvements Planned"

On the 30th, the Financial Supervisory Service (FSS) announced that it will implement institutional improvements, including strengthening guidance on product brochures, to prevent damages related to automobile financial fraud.

According to the FSS, recently, fraud cases have continuously occurred where consumers are induced to purchase vehicles using automobile financing such as loans, installments, and leases under the promise of high returns, only for the perpetrators to abscond after defrauding them. In response, the FSS, together with the Korea Credit Information Services and the specialized credit finance industry (yeojeon-eop), has prepared improvement measures to be implemented starting from the 1st of next month.

The product brochures will include newly established major fraud types and cautionary statements, and the credit information code system will be improved so that yeojeon companies can accurately grasp consumers' usage status of automobile loans, leases, and installments. Plans also include enhancing internal controls of yeojeon companies by strengthening verification of consumers' income and employment proof during automobile finance screening.

Consumers should also be aware of certain points. Even if it is automobile financial fraud, if the consumer directly signs the contract, the responsibility may fall on them. Additionally, it is important to note that if one lends their ID or provides false answers to financial institutions, it will be difficult to receive damage relief. If a person knowingly participates in the fraud despite recognizing it as automobile financial fraud, they may suffer credit disadvantages or be subject to criminal punishment as an accomplice.

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