Police Launch Special Crackdown on Illegal Private Lending... Rewards of up to KRW 125 Million

Nationwide special crackdown to begin in November
Police to seek reduced penalties for criminal organization members who turn themselves in

Police will launch a nationwide special crackdown on illegal private lending to stamp out related crimes. They will seek reduced penalties for members of criminal organizations who turn themselves in, and offer rewards of up to KRW 125 million for information leading to arrests.

The Korean National Police Agency's National Investigation Headquarters announced on November 1 that it will establish dedicated investigative units at police agencies and stations nationwide for six months and conduct a special crackdown on illegal private lending. The special period for voluntary surrender and reporting will run through December 31, 2026.

The crackdown will target illegal lending businesses, the collection of interest exceeding the statutory annual rate of 20%, and illegal debt collection. Police will also focus on new and modified forms of illegal lending that use gift certificates, virtual assets, and other means.

Cases of illegal private lending rose steadily, from 2,126 in 2023 to 3,391 in 2024 and 5,519 in 2025. A further 4,405 cases were reported from January to September 2026, up 5.3% from 4,185 during the same period last year. The number of arrests also increased over the same period, from 2,373 to 2,438.

Police will form dedicated teams within the anti-corruption and economic crime investigation units and metropolitan crime investigation units of city and provincial police agencies, and focus investigations on major cases involving organized criminal activity or new methods. They will also deploy 159 officers assigned as dedicated investigators for illegal private lending at 105 police stations nationwide in July 2026.

Measures to protect victims will also be implemented. Victims who have committed minor illegal acts, such as lending their bank accounts or SIM cards under threats or coercion from illegal lenders, may be released with a warning or receive reduced penalties through summary trials, taking into account their financial circumstances and the circumstances in which they became involved.

People who took part in crimes and turn themselves in during the special surrender and reporting period may, in consultation with relevant agencies, have their sentences reduced or waived. Voluntary surrenders, reports of victimization, and tips can be made by calling 112 or contacting police stations nationwide. Those whose information helps police arrest key suspects will also be eligible for rewards of up to KRW 125 million.

With the revised Loan Business Act taking effect in July 2025, the maximum statutory penalties for operating an illegal lending business or placing illegal lending advertisements were increased from up to five years in prison or a fine of up to KRW 50 million to up to 10 years in prison or a fine of up to KRW 500 million. Loans with annual interest rates exceeding 60%, as well as antisocial lending contracts involving assault or threats, are void with respect to both principal and interest.

Hong Seok-ki, head of the National Investigation Headquarters, said, "Through this special crackdown, we intend to uproot the criminal ecosystem of illegal private lending, an exploitative financial crime that destroys the lives of ordinary people." He added, "We will track down and strip criminals of their proceeds to the end, including by confiscating and collecting interest illegally charged by lenders and returning it directly to victims."

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