FSS Launches Intensive Crackdown on Predatory Lending Targeting Vulnerable Citizens

The Financial Supervisory Service (FSS) is launching on-site inspections targeting loan companies and online lending platforms to curb illegal private lending that preys on ordinary citizens and those in difficult financial situations. This measure comes as the number of individuals finding it difficult to obtain loans from major financial institutions increases, leading to a rise in private lending users for the first time in five years.

The FSS will conduct inspections on approximately 10 loan companies and online lending platforms from June 8 to August 28, a period of about three months. The selection of inspection targets will be based on customer complaints, tips, and past investigation records.

Key areas of focus for the inspections include illegal debt collection, violations of maximum interest rates, and links to illegal lending operations. This will also cover 'zombie debt' collection, which involves pursuing debts even after a court has granted bankruptcy discharge. Bait-and-switch loans that defraud customers of fees and deceptive loans that increase interest burdens are also subject to inspection.

The FSS will jointly investigate the connection of online lending platforms to illegal private lending with the Gyeonggi Provincial Special Judicial Police. The FSS emphasized that predatory financial practices are illegal acts that drive vulnerable citizens to despair and crush their will to recover economically.