"12,000% Murderous Interest Rates"... High-Interest Illegal Loan Shark Ring Busted

by Lee Eunseo

Published 11 Dec.2025 11:26(KST)

A group that set up an illegal loan shark office in an apartment and operated a high-interest illegal lending business with rates exceeding 10,000%, pocketing hundreds of millions of won, has been apprehended by the police.

Interior view of an illegal loan shark organization office. Seoul Yeongdeungpo Police Station.

On December 11, the Seoul Yeongdeungpo Police Station announced that it had arrested 12 men in their 20s, including the ringleader of the illegal loan organization, on charges of violating the Loan Business Act, the Debt Collection Act, and the Interest Limitation Act. Of these, four individuals, including the head of the sales team, have been detained.

According to the police, from June of last year to around October of this year, the group used burner phones to contact 173 people via unsecured loan advertisements on social networking services (SNS) and engaged in illegal lending, amassing a total of 520 million won.

Their targets were ordinary citizens who had difficulty obtaining loans from financial institutions but urgently needed cash. Using personal information purchased through Telegram and other channels, they contacted victims, offering unsecured loans ranging from as little as 1 million won to as much as 5 million won. The interest rates reached a staggering 4,000% to 12,000%.

The group required borrowers to submit photos holding a loan agreement and provide the contact information of acquaintances as collateral. If a borrower failed to repay, they would inform acquaintances with false claims such as "the debtor went to an entertainment bar," or send threatening messages to the debtor's children.

To evade detection, the group operated out of apartments in the Daegu area that were difficult to access from the outside and relocated their office every one to three months. Profits from the illegal lending business were managed through fraudulent bank accounts and laundered via gift certificates and cash.

A police official stated, "We will continue our investigative efforts to eradicate illegal loan sharking, usury, and debt collection crimes targeting ordinary citizens."