Flyers advertising credit card loans from moneylenders are posted on a street in Seoul.NEWS1
A registered loan brokerage allegedly handed the personal information of about 1,500 people seeking loans to illegal lenders. One of those lenders charged some borrowers an annual interest rate of 207 percent, more than 10 times the legal cap, police said Wednesday.
The Gangneung Police Station in Gangwon apprehended 13 people on charges of violating the Credit Business Act. Those apprehended include the head of the brokerage, its employees and couriers who collected interest payments, one of whom has been detained.
The suspects ran the brokerage out of Seoul and other areas. They collected personal information from loan applicants and passed it to illegal lenders. The illegal loans they brokered totaled more than 22 billion won ($16.6 million), and the brokerage took about 2 billion won in commissions.
One victim agreed to pay 207 percent a year on a 200 million won loan in September 2024. The lender deducted 10.8 million won in interest up front, so the victim received only 189.2 million won. In November that year, the victim repaid the principal along with about 47 million won in additional interest.
The victim ultimately paid 57.8 million won in interest. At the legal maximum of 20 percent a year, the interest would have been about 5.91 million won, about 51.89 million won less.
The suspects used aliases and communicated on burner phones registered in other people’s names to avoid being traced, police said. They also moved criminal proceeds in cash through motorcycle courier services rather than bank transfers to hide the money trail.
Customers receive loan consultations at a commercial bank in Gyeonggi on July 15.NEWS1
Police identified and apprehended the brokerage’s operators and the other suspects one by one over an eight-month investigation. Investigators seized 1.26 billion won in cash believed to be criminal proceeds and obtained a pre-indictment freeze on another 1.9 billion won in suspected proceeds.
Prosecutors sent two suspects last year; one is in detention. The remaining 11 are set to be referred to the Prosecution Service on Wednesday. The Prosecution Service took over indictments when the Supreme Prosecutors’ Office was abolished on Oct. 2.
Police also applied penalty provisions on the illegal distribution of personal information that took effect in July last year.
Authorities have directed the victims identified so far to the government’s one-stop support system for victims of illegal private lending. Police are also connecting them with the Credit Counseling and Recovery Service for debt adjustment to help them recover financially.
Contact details, ID card photos and information about acquaintances handed to illegal lenders can be exploited for loan fraud, illegal debt collection and other crimes, police warned. Police urged the public to be especially careful before sharing personal information.
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
