'War on Illegal Private Loans'... Gyeonggi-do to Launch Intensive Investigations Starting Next Year

Gyeonggi Province recently announced that it will conduct year-round intensive investigations to eradicate illegal high-interest private loans following an incident where a woman in her 30s, raising her daughter alone, took her own life while suffering from high-interest illegal loans.

On the 4th, Ki Do, Chief of the Gyeonggi Province Special Judicial Police Unit, officially declared the crackdown on illegal lending businesses, stating, "We will conduct continuous and strong investigations on all fronts against the collection of interest rates exceeding the legal limit and unregistered lending activities targeting small business owners, micro-entrepreneurs, and ordinary citizens."

Accordingly, the Special Judicial Police Unit plans to increase its dedicated team from one to two starting next year and continue investigations into illegal lending businesses year-round, rather than only during specific periods.

The main investigation targets are ▲ unregistered lending activities ▲ lending with an annual interest rate exceeding the legal maximum of 20% ▲ advertising activities by unregistered lenders.

Gyeonggi Province held a proclamation ceremony to eradicate illegal activities in the private loan industry. Photo by Gyeonggi Provincial Government

Along with investigations, the Special Judicial Police Unit will strengthen efforts to block phone numbers used for illegal lending advertisements and promote awareness of the dangers of illegal lending businesses.

The current "Act on Registration of Credit Business and Protection of Finance Users" stipulates that unregistered lending activities or unregistered lending advertisements are punishable by imprisonment of up to 5 years or a fine of up to 50 million KRW. Additionally, charging interest rates exceeding the legal limit can result in imprisonment of up to 3 years or a fine of up to 30 million KRW.

From 2023 to 2024, the Special Judicial Police Unit apprehended a total of 25 illegal lenders. The total amount of illegal loans uncovered was 19.6 billion KRW. Notably, a group of loan sharks charging a murderous annual interest rate of up to 38,274% was arrested. This is the highest interest rate recorded among cases apprehended by special judicial police units nationwide.

Ki Do, Chief of the Special Judicial Police Unit, said, "Due to the government's interest rate hikes and loan regulations, there is a high possibility that illegal lending crimes targeting socially vulnerable groups will increase," and urged, "We ask all residents to actively report and provide information."

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