Illegal Loan Sharks Exploit Youths with '3050 Loans' at High Interest Rates
An illegal loan sharking operation has come to light, providing loans to low-credit youths at interest rates exceeding 3000% per annum and resorting to blackmail using nude photos of debtors when repayments are delayed.
The Seoul Dongdaemun Police announced on the 13th that they have arrested 34 individuals, including the main operator A, involved in these illegal activities, with 6 of them being detained.
From October 2022 to July of the following year, they provided loans known as '3050 loans' to financially vulnerable youths.
This loan structure allowed borrowers to take out 300,000 KRW and required them to repay 500,000 KRW just one week later, imposing an interest rate greatly exceeding the legal maximum rate of 20% per annum, reaching around 3000% per annum. Through this scheme, they illegally extorted approximately 1.16 billion KRW from 179 victims.
The interest rate of around 3000% per annum greatly exceeds the legal maximum rate of 20% per annum.
A Cruel Debt Collection Method Leading to Digital Sexual Crimes
The most shocking aspect of this illegal loan operation was their debt collection methods.
During the loan process, they obtained nude photos of the debtors and their acquaintances' contact information. When repayments were delayed, they used these photos to create advertisements for sexual services and distributed them to the debtors' acquaintances. They also made threatening phone calls, using profanity to psychologically pressure the acquaintances of the debtors.
Operator A even installed soundproof booths in the office to create an environment where employees could freely use profanity and threats.
They conducted all aspects of the loan process through text messages and KakaoTalk, and meticulously planned their crimes by changing offices every three months.
A fled the scene without attending a pre-arrest interrogation in July of last year; however, police obtained intelligence indicating that A was using a high-end golf course in Gangwon Province, and arrested A while returning home from golfing at the end of last month.
A had evaded police pursuit for 10 months by using disguises.
To prevent further harm, police have confiscated the suspects' mobile phones and provided protective measures such as deleting disseminated videos through the Digital Sexual Crime Victim Support Center. They have also cooperated with the Financial Supervisory Service and Legal Aid Corporation to file a lawsuit for confirmation of the invalidity of the loan contracts, which is currently ongoing.
A police official emphasized, "We will continuously enforce strict measures against illegal private financing targeting economically vulnerable groups that resort to small loans amid difficult economic conditions."
This incident serves as a case highlighting the realities of illegal loan operations targeting youths in financial difficulty, raising awareness about a new form of crime where illegal high-interest loans are combined with digital sexual crimes.
Experts recommend utilizing government or municipal financial support programs or seeking help from registered legitimate financial institutions when urgent funds are needed.
Image source: Reference material for understanding the article / gettyimagesbank
