Illegal Loan Ring Handed Over to Prosecutors for Preying on Vulnerable Groups with Annual Interest Rates Up to 13,000%

The Daegu Metropolitan Police Agency announced today (the 31st) that it has detained and transferred two individuals, including the ringleader A of an illegal lending organization, to prosecutors on charges of violating the Loan Business Act. They are accused of issuing small-scale, non-face-to-face loans to some 900 financially vulnerable people, extracting exorbitant annual interest rates of up to 13,000%, and raking in illicit profits amounting to 900 million won.

Additionally, police referred 14 members of the lending organization to prosecutors without detention on the same charges and requested Interpol Red Notices for three other members currently staying abroad.

According to police, the Daegu-based ring led by A used illegally acquired personal information from June 2025 to May of this year to make random loan-solicitation phone calls. They lent approximately 1.66 billion won across 2,850 transactions to 952 debtors, charging annual interest rates ranging from 1,150% to 13,000%, and pocketed illicit gains worth about 900 million won.

Investigations revealed that A's organization—which divided roles among a ringleader, managers, and a loan execution team—preyed on vulnerable victims struggling to secure loans by lending them sums ranging from 100,000 to 4 million won and demanding murderous interest rates.

Furthermore, when executing the loans, the group secured handwritten promissory notes featuring photos of the debtors' faces along with contact information for ten or more acquaintances. When borrowers failed to repay on the promised dates, the lenders hurled verbal abuse and insults at them and forced their families to pay off the debts instead.

A police official stated, "Illegal private financing is a serious crime that exploits the desperate circumstances of ordinary citizens facing financial hardship to reap massive profits and destroys victims' daily lives through illegal collection practices," adding, "We plan to continue cracking down to eradicate illegal private lending."
※ Please note: This article was translated by AI and may contain errors.