One-Stop Support for Illegal Private Lending: 3,421 Cases of Debt Collection Halted in Six Months... Relief Applications Now Unified

645 Debt Settlements Reached
Support for Victims from Police Report to Investigation and Litigation

#Minor “A” borrowed 350,000 won from an illegal private lender on Telegram to fund illegal gambling. He was expected to repay 700,000 won within a week, resulting in an annual interest rate of about 5,214%. When he was unable to repay the loan, the lender illegally distributed his photos and the promissory note to his friends using their contact information. Afterwards, following a report by his parents, the Credit Counseling and Recovery Service intervened with one-stop support for victims of illegal private lending, demanding settlement of the debt and a refund of any excess interest paid. The case was also transferred to the Financial Supervisory Service for investigation, appointment of a debtor representative, issuance of a loan contract annulment certificate, suspension of the relevant bank account, and other measures.

Financial authorities are expanding one-stop support for victims of illegal private lending, connecting every step from reporting the crime to investigation and litigation. The key point is integrating online reporting procedures and linking support from the Credit Counseling and Recovery Service with the initial police report, thus reducing victims' burden.

The Financial Services Commission announced on August 30 that, at a meeting of the Subcommittee on Illegal Private Lending under the Policy Finance Promotion Group held on August 28, they had confirmed supplementary measures for one-stop support for illegal private lending victims.

The one-stop support system for victims of illegal private lending refers to a scheme in which—once a report is received—financial authorities request an investigation from the National Police Agency, demand that lenders stop debt collection, and instruct financial companies to suspend illegal private lending accounts, with all related institutions working together to protect victims.

With these supplementary measures, starting from August 31 victims can apply for remedies such as stopping illegal debt collection, appointing a debtor’s representative, blocking use of their phone number, and requesting a police investigation—all in one go through the Financial Supervisory Service website. Previously, victims had to submit separate applications for each type of remedy and repeatedly provide creditor details and loan/repayment records; now, a single report will allow them to apply for all necessary support measures together.

The process linking police reports to support from the Credit Counseling and Recovery Service will also be streamlined. If victims agree, they can connect via QR code to the Credit Counseling and Recovery Service app at the scene of the police report and request a consultation.

Support during investigation and litigation will be further strengthened. If a victim appoints the Credit Counseling and Recovery Service as their legal representative, a dedicated staff member will handle viewing and copying investigation materials, supplementing evidence, checking on investigation status, and receiving notifications of investigation results, all on behalf of the victim.

When a police investigation identifies the lender, the Credit Counseling and Recovery Service will work with the Korea Legal Aid Corporation to support lawsuits for validation of loan annulment, restitution of unjust enrichment, and claims for damages to help victims recover losses.

The one-stop support for illegal private lending—currently only available offline—will be expanded online starting in October. Once the online service launches, victims will not need to visit a local financial support center but can be assigned a dedicated representative from the Credit Counseling and Recovery Service to supplement their report and access relief measures via phone or text.

An official from the Financial Services Commission stated, “We will continue to monitor and improve the one-stop support service for illegal private lending in collaboration with relevant organizations so it serves as an effective means of protecting victims. We will also strengthen publicity and guidance so no victim misses out due to a lack of awareness of the system.”

Meanwhile, in the six months since the service launched at the end of February, 821 people have received consultations at local financial integration support centers, and 656 victims have filed 4,705 reports of victimization. The Credit Counseling and Recovery Service halted 3,421 cases of illegal debt collection and helped negotiate settlement for 645 debts. The Financial Supervisory Service issued or notified 154 certificates confirming loan contract annulment, and referred 895 lenders suspected of criminal activity to the police for investigation.

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