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The Korea Herald
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THE INVESTOR
March 29, 2024

Finance

No. of illegal loan sharks surge in Korea

  • PUBLISHED :December 07, 2016 - 10:43
  • UPDATED :December 07, 2016 - 10:43
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[THE INVESTOR] The number of unregistered loan lenders is growing in South Korea amid deteriorating economic conditions, according to the financial watchdog on Dec. 7.

The number of consumer damage reports originating from unregistered private lenders stood at 2,138 cases in the first 11 months of this year, up a whopping 90 percent from the same period a year earlier, according to the Financial Supervisory Service.




Those unregistered loan sharks usually lure borrowers through the internet or leaflets, slapping them with exorbitant annual interest rates of more than 3,000 percent. In South Korea, the maximum loan interest rate is currently set at 27.9 percent.

The FSS said those unregistered lenders go to all lengths to collect loans, often contacting borrowers’ family members and relatives, and pressuring them to repay the loans in their place.

The regulator said it plans to ask the police or the prosecution to investigate “wicked” loan sharks as part of efforts to prevent consumer damage.

The government has been conducting a massive clampdown on usurers, which mostly victimize people in lower income brackets who are often denied access to lending by banks and other institutions.

(theinvestor@heraldcorp.com)

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