'Illegal Debt Collection Punishment'... Financial Supervisory Service Special Inspection on Loan Businesses

On the 29th, as the COVID-19 pandemic continues to persist, illegal loan business card-type flyers from private loan companies are scattered across the Insadong street in Jongno-gu, Seoul. Photo by Moon Honam munonam@

The Financial Supervisory Service (FSS) announced on the 10th that it will conduct a special inspection targeting loan sharks.

Since President Yoon Seok-yeol instructed on the 9th of last month to devise multifaceted measures to crack down on illegal private financing and to protect victims, the FSS has been intensifying efforts to eradicate illegal private financing. At a recent illegal private financing field meeting held at the FSS, President Yoon defined high-interest loans and illegal debt collection as crimes that prey on the livelihood of the people, emphasizing, "We must thoroughly crack down on illegal private financing and confiscate all illegal profits from these activities."

Amid rising debt repayment burdens on ordinary citizens due to high interest rates and economic downturn, loan sharks are also facing deteriorating business conditions such as rising delinquency rates. As a result, there has been an increase in debt collection through third parties such as acquaintances and repeated phone calls and visits. According to the FSS, the number of consultations related to illegal debt collection has been steadily increasing, from 580 cases in 2020 to 869 in 2021, 1,109 in 2022, and already 902 cases in the first half of this year.

The FSS plans to dispatch four inspection teams to conduct on-site inspections of 10 loan businesses, including five money lending companies and five debt collection agencies, by the end of January next year. During this special inspection, they will closely examine whether there are any unfair debt collection practices that destroy the daily lives of ordinary people, such as collecting debts whose statute of limitations has expired or seizing deposits necessary for the livelihood of vulnerable groups.

The FSS intends to take strict measures against illegal and unfair debt collection practices found during the inspections and will refer serious violations such as assault and threats to investigative authorities. Regarding debt collection practices that infringe on the livelihood of the people, the FSS plans to actively promote institutional improvements related to predatory debt collection practices in collaboration with the government-wide task force (TF) for eradicating illegal private financing and the Fair Finance Promotion Committee.

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