Illegal Loan Ring Arrested for Charging Up to 40,000% Interest and Threatening Debtors

A group has been arrested by police for issuing illegal high-interest loans to some 600 ordinary citizens in urgent need of cash and threatening the debtors.

The Incheon Metropolitan Police Agency announced today (the 27th) that it has detained two individuals, including a man in his 30s identified as 'A' who is the mastermind of the illegal private financing ring, on charges of organizing, joining, and engaging in a criminal organization, as well as violations of the Lending Business Act and the Act on Collection of Claims. Twenty other men and women ranging from their 20s to 50s, including cash withdrawers and counselors, have been booked without detention.

A and his accomplices are accused of illegally lending 870 million won across 2,139 occasions to 613 people at high interest rates exceeding the legal interest rate (20% per annum) between November 2024 and February of this year.

Investigations revealed that the group raked in illicit profits amounting to 870 million won by charging exorbitant annual interest rates ranging from 32% to 41,192%.

According to the findings, A and his group collected the phone numbers of loan applicants who contacted them after seeing advertisements on loan brokerage platforms, and then approached the victims using burner phones to make it appear as if they were a different lending company.

The group allegedly operated by dividing roles such as mastermind, counselor, deliverer, and withdrawer, utilizing burner phones, burner accounts, and virtual private networks (VPNs) to carry out their crimes.

Some members of the ring contacted the family members of female debtors who failed to repay their loans on time, threatening them by saying, "We'll do whatever we want, whether it's raping them or selling them off to an entertainment establishment," while demanding surrogate repayment.

Furthermore, they mocked victims who attempted to report them to the police by saying, "Do you think I'd be scared?" and even argued to responding police officers, "I haven't received my money, so how do you expect me to just sit still?"

Upon apprehending A's group, the police froze approximately 460 million won worth of assets, including financial assets and real estate, from their criminal proceeds through pre-indictment preservation.

Police also provided support for debt adjustment through the Credit Counseling and Recovery Service to a female victim in her 30s who attempted suicide due to threats from A's group.

A police official advised, "When conducting non-face-to-face online loan transactions through loan brokerage platforms, please verify whether the company matches the advertisements and exercise special caution."

(Photo provided by Incheon Metropolitan Police Agency, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.