Illegal High-Interest Loans Using Fake Mobile Phone Rental Contracts as Collateral... FSS Issues 'Consumer Alert'

Illegal Private Lending Using Fake Rental Contracts as Collateral
Fraudulent e-SIM Sales Targeting Foreigners Disguised as Investment Scams

Recently, a case occurred in which illegal, high-interest loans were issued using fake mobile phone rental contracts as collateral. In response, the Financial Supervisory Service (FSS) issued a consumer alert marked as “Caution” on July 20.

Mobile Phone Rental Illegal Private Loan Structure. Financial Supervisory Service

The FSS reported that it uncovered this new type of illegal private loan crime while collaborating with the Southern Gyeonggi Provincial Police Agency and the Seoul Yeongdeungpo Police Station.

Illegal private loan operators colluded with mobile phone rental companies to approach victims and, as a loan condition, required them to register for a business license as delivery service operators.

The victims were then made to sign mobile phone rental contracts, and the operators provided loans with annual interest rates exceeding 150%, using these contracts as collateral.

Although the rental contracts were fake—there was no delivery of mobile phone devices, no U-SIM activation, and the victims had no obligation to pay rental fees to the rental company—the victims were made to sign a confirmation of receipt (installation confirmation) for the handset, making it appear to be a legitimate contract.

If the principal and interest were not repaid, the rental claims were transferred to another company, and in some cases, the victims were threatened with criminal charges during the collection process.

A representative from the FSS explained, “Although these appear to be ordinary rental contracts, in reality they constitute illegal private loans with high interest rates that fall under the Loan Business Act.”

Similar fraud schemes are also rampant, where scammers lure victims by promising high returns for side jobs involving the purchase and sale of e-SIMs, steal investment money, and then disappear.

The scammers recruited investors online, claiming that by joining businesses selling e-SIMs to travelers and foreigners, a certain profit was guaranteed.

They lured additional investments from victims by promising monthly returns exceeding 20% and running frequent promotions such as price discount events.

These scammers launched YouTube channels and posted multiple AI-generated promotional videos, presenting the business as a high-profit side hustle. They also promoted the fraudulent business as legitimate by sharing numerous testimonials about their returns on social networking services (SNS).

Later, when victims tried to withdraw their earnings, the scammers delayed disbursement by demanding additional payments under the pretext of taxes and then disappeared after shutting down their websites.

The FSS advised consumers to ▲be suspicious of illegal private loans if a fake rental contract is required as a loan condition and ▲be aware that all information encountered online—on YouTube, blogs, and news articles—can easily be manipulated or falsified.

An FSS spokesperson added, “If you are faced with abnormal demands during the transaction process, or you suspect a scam, you should immediately stop the transaction and promptly report it to the police or notify the FSS.”

This content was produced with the assistance of AI translation services.