Illegal Activities Detected in 'Online Daebu Brokerage Platform'... "Strict Sanctions Including Business Suspension"

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Recently, due to difficult economic conditions, concerns about illegal private loan damage among the lower-income class have continued, and issues regarding illegal private loan contacts through online loan brokerage platforms have been persistently raised. Accordingly, the Financial Supervisory Service (FSS), in collaboration with the Seoul Metropolitan Government, Seoul Metropolitan Police Agency, and Financial Security Institute, conducted a focused inspection on five loan brokerage platforms registered in Seoul.

According to the FSS on the 1st, this inspection involved IT experts from the FSS and the Financial Security Institute who thoroughly examined the management status of customer information, including the types of customer data stored in the loan brokerage platforms' computer systems, details of data provision, and any hacking incidents.

The joint inspection team detected cases of false and exaggerated advertisements and violations of loan advertisement display obligations. Loan brokers are prohibited from advertising in a manner that is factually incorrect or excessively exaggerated. The team found that two loan brokers posted false and exaggerated advertisements such as "loans available without conditions" to promote their loan brokerage platforms or listed advertisements without the consent of the loan providers. They plan to impose business suspension and fines according to relevant laws.

Additionally, it was confirmed that four loan brokers failed to properly display their trade names and registration numbers or did not post consumer protection obligation notices on the initial screen as required, thus violating loan advertisement obligations.

Cases of inadequate customer information security and insufficient management systems for computer systems were also identified. Most brokers are small-scale businesses operated by a single individual without professional experience in IT operations, lacking established information security system frameworks. Overall, the management system for computer processing is insufficient, and measures to ensure the stability of personal information are inadequate.

In response, the joint inspection team instructed immediate deletion of personal information past its retention period to ensure data safety and guided the establishment of procedures for personal information use and management, including encryption, to manage data thoroughly.

Regarding the poor security and management systems of computer systems, the team guided securing computer system security and clarifying responsibilities related to outsourced tasks by specifying detailed contents of outsourcing in written contracts for proper management.

The joint inspection team plans to strictly take action according to laws and principles against the ten violations identified among loan providers during this inspection. Considering that most online loan brokerage platforms are small-scale and have inadequate internal management systems, they plan to prepare and guide a set of guidelines specifying essential requirements related to computer systems and information security to strengthen customer information security.

In particular, the FSS will hold a loan industry workshop in the first half of this year to disseminate violations such as false and exaggerated advertisements by online loan brokers, fostering compliance awareness to protect loan users' rights. They will also provide education on personal information protection and computer system security necessary for operating online loan brokerage platforms to raise awareness of information security and prevent risks of personal information leakage in advance.

The FSS stated, "We will continue to strengthen cooperation among financial authorities, local governments, and investigative agencies to actively prevent illegal private loan contacts through online loan brokerage platforms and damages caused by illegal acts of loan providers." They urged consumers to pay special attention to consumer precautions to prevent damages from illegal private loans and illegal acts by loan providers.

Seoul Yeouido Financial Supervisory Service building. Photo by Younghan Heo younghan@

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