A group of illegal lenders has been arrested by the police for offering high-interest loans exceeding 3000% annual interest rates targeted at young people with low credit ratings and for blackmailing them with nude photos if they failed to repay.
The Seoul Dongdaemun Police Station announced on the 13th that they apprehended 34 individuals, including the mastermind, identified as A, on charges of violating the Lending Business Act and the Sexual Violence Punishment Act, and that 6 of them have been detained.
They created an internet site promoting small loans and operated an unregistered lending business, providing what is commonly referred to as '3050 loans' to victims from October 2022 to July 2023. The method involves lending 300,000 won and requiring repayment of 500,000 won a week later, which translates to an annual interest rate of 3000%. The legal maximum interest rate is 20% per year. Through this method, the group extorted approximately 1.16 billion won from 179 victims.
The group collected nude photos and contact information of acquaintances from debtors when lending money. If a debtor failed to repay, they created promotional brochures for prostitution using the nude photos and distributed them to the debtor's acquaintances. They also sent insulting and threatening text messages to the debtor's acquaintances.
Mastermind A installed soundproof booths in the office of the illegal lending company to allow employees to loudly insult and threaten victims. The group conducted all lending processes via text messages and Kakao, showing meticulousness by moving their office every three months, according to the police.
Previously, the police apprehended A and 10 others in 2023. Intermediate manager B had his six-year prison sentence confirmed by the Supreme Court in February, but A fled after failing to appear for a pre-arrest questioning in July last year. A evaded the police for 10 months while disguised. The police received intelligence that 'A was using a high-end golf course in Gangwon Province' and arrested A after he returned home following a round of golf at the end of last month.
The police seized the suspects' mobile phones to prevent the distribution of nude photos. They also provided protective measures such as deleting victim videos through the Digital Sexual Crime Victim Support Center. Furthermore, they are collaborating with the Financial Supervisory Service and the Legal Aid Corporation to file a lawsuit to invalidate the lending contracts, which is currently ongoing.