South Korea Targets Illegal Private Lenders as Cases Surge
South Korean police announced an intensive nationwide crackdown on illegal private lending crimes on Wednesday as authorities respond to increasingly sophisticated lending and debt collection methods.
The initiative includes assigning dedicated investigators to police agencies handling a high volume of cases, expanding the authority to suspend phone numbers used for illegal debt collection, and pursuing faster restrictions on accounts connected to these crimes. The measures are also intended to strengthen protections for victims.
Comprehensive Plan Targets the Chain of Criminal Activity
The National Office of Investigation under the Korean National Police Agency said it has developed a comprehensive plan to eliminate crimes associated with illegal private lending.
The plan focuses on disrupting the chain of criminal activity and creating a more systematic approach to investigations. It also calls for preventive measures designed specifically to address the methods used in illegal private lending offenses.
According to the office, illegal private lending and the debt collection practices associated with it have become increasingly sophisticated. Authorities said these developments have made the need for broader and more comprehensive countermeasures more urgent.
Dedicated Investigators to Be Assigned Across the Country
Under the plan, police will assign at least one dedicated investigator to each of the 105 police agencies that handle an average of more than 20 illegal private lending cases every year.
The measure will place investigators focused on these offenses at agencies experiencing comparatively high case volumes. It forms part of the broader effort to conduct more organized investigations and break the chain of activity behind illegal private lending crimes.
The dedicated investigators will be deployed throughout the country as police intensify their response to the growing number of reported cases.
Police Expand Measures Against Illegal Debt Collection
The Korean National Police Agency will also expand the authority to request the suspension of phone numbers used for illegal debt collection.
Previously limited in scope, this authority will be extended to every police station chief nationwide. The expanded authority is one of the measures being introduced to address the methods used in illegal debt collection and strengthen protections for those targeted.
Police will also work to establish a system that can quickly suspend transactions involving accounts used in illegal private lending crimes. This measure is intended to allow authorities to act more swiftly when accounts are identified as being connected to these offenses.
Illegal Private Lending Cases More Than Quadruple
Police data show that the number of illegal private lending crimes has risen sharply over the past four years. Authorities recorded 1,362 cases in 2021. That number increased to 5,519 cases last year, meaning the total more than quadrupled during the four-year period.
The reported increase comes as police observe more sophisticated methods of illegal lending and debt collection, reinforcing the need for the nationwide measures outlined in the new plan.
Younger Adults Among a Growing Share of Victims
Most victims of illegal private lending crimes were day laborers and self-employed individuals, according to police. Authorities have also observed an increase in the proportion of victims in their 20s and 30s. More recently, crimes targeting teenagers and foreign workers have become increasingly common.
Police enforcement figures further demonstrate the scale of the issue. Between November and June, authorities apprehended 2,060 people involved in illegal private lending offenses. Of those individuals, 76 were placed under arrest.
