Persistent Illegal High-Interest Rates and Debt Collection... Seoul City Operates Intensive Reporting Period for Illegal Loan Businesses

Operation of 'Visiting Consultation Centers' at Traditional Markets in 5 Regions Until the 13th of Next Month for Unregistered Businesses, High-Interest Loans, and Illegal Advertising
Strong Measures Including Investigation Requests Planned for Violations

The Seoul Metropolitan Government is stepping up support for recovery from damages caused by illegal high-interest loans and illegal debt collection. They will operate a focused reporting period to receive damage cases and take strong measures such as requesting investigations against companies that have committed illegal acts.

According to Seoul City on the 12th, the city will operate the 'Illegal Lending Damage Focused Reporting Period' from today until September 13. The reporting targets include ▲unregistered lending companies ▲illegal high-interest loans and debt collection ▲damages from illegal lending advertisements, among others.

Since 2016, Seoul has been operating the 'Fair Trade Comprehensive Counseling Center' to protect citizens from illegal lending businesses. Last year, a total of 293 consultations were conducted, and the amount of damage relief reached 568 million KRW. However, based on the first half of this year, damage reports by type show that high-interest loans accounted for 52.2% (47 cases), illegal debt collection 13.3% (12 cases), and fees 4.5% (4 cases), revealing that reports of damages related to 'high-interest loans' and 'illegal debt collection' remain consistent compared to the same period last year.

Accordingly, Seoul will focus on damage relief related to illegal lending by operating the focused reporting period and will run 'visiting counseling offices' centered on traditional markets in five regions. To accommodate busy merchants ahead of Chuseok, lending specialist counselors will visit traditional markets every Friday (1 PM to 4 PM) to provide direct consultations. The schedule includes Gongneung-dong Dokkaebi Market (8.16), Namdaemun Market (8.23), Yeongdong Traditional Market (8.30), Junggok Jeil Alley Market (9.6), and Yeongdeungpo Traditional Market (9.13).

Additionally, illegal lending advertisement flyers and banners within traditional markets will be collected, and phone numbers used in illegal lending advertisements will be blocked at the source through the 'Dae-po Killer System.' Introduced in October 2017, the 'Dae-po Killer System' is an unlimited automatic calling program that calls illegal lending phone numbers registered in the system every 3 seconds, keeping the line busy to block the number. Through this system, a total of approximately 26,500 calls have been blocked so far, and 8,466 phone numbers used in illegal lending advertisements have been suspended.

Damage counseling and relief primarily proceed by professional counselors verifying interest rates based on financial transaction records submitted by debtors and informing them of the loan principal and interest. If the debtor has paid more than the loan principal and interest to the illegal lender, the process encourages parties to reach an agreement such as 'return of unjust enrichment' or 'waiver of remaining debt' to terminate the creditor-debtor relationship.

Furthermore, in the second half of the year, joint inspections between the city and districts will be conducted to prevent illegal acts by lending businesses. Inspection items include ▲illegal high-interest daily loans ▲excessive lending ▲illegal fee collection, and companies found violating regulations will face swift administrative actions such as fines, business suspension, and immediate investigation requests.

Kim Kyung-mi, Director of the Fair Economy Division, said, "Even when suffering from illegal lending damages, many hide the facts due to concerns about identity exposure or lack of understanding of the law, sometimes not even recognizing the damage itself. We will minimize the suffering of ordinary citizens and consumer damages caused by illegal lending through continuous on-site inspections even after the focused reporting period."

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