▲ Online cafe and posts
A large group of illegal private lenders who exploited people in urgent need of cash by disguising their operations as gift certificate purchases have been caught by the police.
The Busan Metropolitan Police Agency announced today (July 21) that it has apprehended 202 individuals involved in illegal private lending, in violation of the Act on Lending Business and Protection of Financial Users.
Out of the 202 individuals, the police have booked 101 for investigation, including verifying transaction records, and have arrested five people, including a suspect identified as A, so far.
Suspect A and others are accused of operating an illegal lending business without registration from last year until recently. They targeted individuals unable to secure loans from first-tier financial institutions, offering small, urgent cash loans and requiring repayment in the form of gift certificates of a higher value—a method known as "gift certificate pre-sales."
They conducted transactions with victims who contacted them after seeing promotional posts on online cafes.
In many cases, the interest rates far exceeded the legal limit, ranging from 1,000% to 5,000%, such as lending 300,000 won and demanding 500,000 won in return after 15 days.
There was even a case where an annual interest rate of 14,000% was applied.
When debtors failed to repay by the due date, the lenders pressured them by filing criminal complaints, claiming the debtors had committed fraud in direct gift certificate transactions.
The police explained that after receiving reports of the damage, they launched an investigation and analyzed debtor statements and illegal transaction records. They were able to prove that while the transactions appeared to be gift certificate sales on the surface, they were, in fact, illegal loan agreements.
It is reported that the total amount of loans identified by the police so far is nearly 1 billion won.
A police official urged caution, stating, "Even if it appears to be a normal discounted gift certificate transaction or a pre-payment structure, if money is actually being exchanged and exorbitant interest rates are demanded, it is clearly illegal private lending."
(Photo: Yonhap News/Provided by Busan Metropolitan Police Agency)
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