Arranged 46.6 billion won in loans and pocketed 4.9 billion won ... Illegal private lending ring targeting vulnerable groups busted

[Financial News] People involved in illegal private lending firms who approached 3,481 economically vulnerable people offering to help them obtain government-backed loans, brokered loans for them and pocketed 4.97 billion won in fees have been referred en masse to the Public Prosecution Office.
Police said on the 4th that Seoul Gwanak Police Station referred 53 people, including the head of an illegal private lending firm and a law office division chief, to the Seoul Central District Public Prosecution Office on the 22nd of last month on suspicion of violating the Loan Business Act and other laws. Police also sought a pre-indictment preservation order for 430 million won of the criminal proceeds.
The group is suspected of approaching borrowers who had difficulty obtaining loans from conventional financial institutions, offering to broker government-backed loans without being registered as loan brokers, and then pocketing fees equivalent to 10% to 15% of the loan amounts. The alleged conduct took place from March 2024 through last May.
The loans they brokered totaled 46.6 billion won, and the fees they pocketed amounted to 4.97 billion won. Most of the 3,481 borrowers who were victimized had low credit ratings. Investigators found that many of them had requested loans after receiving calls from people posing as government policy agencies or loan brokerage firms, and were then charged illegal fees.
Some of the suspects are also accused of referring cases involving debt adjustment, including personal rehabilitation and bankruptcy, for borrowers with the lowest credit ratings to two law offices during the loan-brokerage process, and pocketing 78.75 million won in return. Police referred them on additional suspicion of violating the Attorney-at-Law Act.
After receiving intelligence about the case last April, police launched an investigation through inquiries and other methods. They searched the firms’ offices and financial accounts used in the crimes, and confirmed records of fee deposits and the identities of those involved.
Police urged people to seek guidance on financial support products for low-income borrowers through legitimate financial institutions to avoid falling victim to illegal loan brokerage. They stressed that anyone who suspects illegal activity, such as being asked to pay a fee under the pretext of a loan, should call 112 immediately.
A police official said, “Illegal private lending crimes are continuing amid difficult economic conditions, including high interest rates and a delayed recovery,” adding, “We will step up special crackdowns and take the lead in eradicating illegal private lending.”
[email protected] Seo Ji-yun Reporter