The Credit Counseling & Recovery Service (CCRS) plans to use financial mydata for in-person and remote debt restructuring as early as the second half of this year. After the Korea Asset Management Corporation (KAMCO) was found to have written off debts for high earners making more than 80 million won a month, exposing loopholes, authorities moved to refine the system.
According to the CCRS on the 1st, the CCRS recently commissioned a project to introduce mydata in the financial sector. The goal is to use mydata to accurately identify the financial assets of debtors who apply for debt restructuring programs and decide whether to forgive debt and by how much.
The information the CCRS seeks to verify is the status of a debtor's hidden financial assets, including bank accounts and funds, financial investments such as stocks, subscribed and held insurance, trusts and individual savings accounts, and dormant deposits. Financial mydata is a service that allows a one-time query of 720 data points held across all financial sectors. The CCRS plans to first build the system and, if needed, query additional information.
The CCRS has until now used only public mydata in the debt restructuring process. Public mydata allows verification of administrative information held by public institutions such as the National Tax Service, the National Health Insurance Service, the National Pension Service (NPS), and the Korea Workers' Compensation & Welfare Service (K-COMWEL). Based on this, the CCRS identified a debtor's income and property.
The CCRS conducted separate procedures to verify the financial assets held by debtors. When a debtor submits related materials such as transaction statements, the CCRS checks the facts with financial companies. If a debtor intentionally hides financial assets, there is a possibility they will not be detected.
Regarding the introduction of financial mydata, a CCRS official said it is to improve the credibility of debt restructuring, adding, It is difficult for a debtor to hide financial assets, but we cannot say it is completely impossible.
KAMCO, which operates a debt restructuring program, also plans to prepare measures to accurately identify financial assets, including virtual assets. KAMCO verifies administrative information through a joint administrative information-sharing network similar to public mydata and identifies financial assets through the Korea Financial Telecommunications & Clearings Institute.
According to the Board of Audit and Inspection's audit of KAMCO, 1,944 of the 32,703 people who had debts written off through the New Start Fund had a debt repayment capacity ratio of 100% or higher. A person in their 40s with a monthly income of 80.84 million won had 200 million won written off from 330 million won in debt.