The Financial Supervisory Service (FSS) has issued a "caution" consumer alert due to the rise of a new type of illegal private lending scheme, in which lenders provide loans secured by installment or leased vehicles and then charge fees such as parking costs to effectively collect high-interest rates.

According to the FSS today (June 25), a total of 12 reports of such illegal private lending practices have been filed so far this year.

The loan amounts for the victims ranged from a minimum of 2.5 million won to a maximum of 30 million won, with interest rates reaching as high as 229% per annum.

The interest rates were calculated by including various incidental costs, such as upfront deductions and parking fees, as interest.

By age group, those in their 30s accounted for the largest share, with 6 victims, representing half of the total. There were 2 victims in their 60s, and 1 each in their 20s, 40s, and 50s.

By region, most of the victims (9 people) resided in the Seoul metropolitan area.

The FSS warned that both the borrower and the lender could face criminal punishment if installment or leased vehicles are provided as collateral.

Even if a victim owns an installment-purchased vehicle, handing over the vehicle without the consent of the installment finance company, which holds the mortgage rights, can be considered concealment of collateral.

In the case of leased vehicles, the ownership belongs to the leasing company, making it impossible to use them as collateral in the first place.

Meanwhile, illegal private lenders have been charging incidental costs under the guise of parking fees, travel expenses, and commissions to extract interest exceeding the legal maximum rate (20% per annum), or have been driving the vehicles without authorization, leading to the charging of fines and tolls to the victims.

They also used intimidation tactics during the collection process, threatening to report the loan to the installment or leasing companies to ensure the victims would be sued.

The FSS emphasized that even for registered lenders, collecting interest exceeding 20% per annum is illegal.

The agency urged, "If you are asked to participate in illegal private lending schemes such as vehicle-collateralized loans, you should immediately report it to the FSS or law enforcement agencies to prevent further damage," adding that "assistance is available through the one-stop comprehensive support system."

(Photo: Yonhap News)