As the financial authorities issued a consumer alert at the "warning" level after damages surged from the online illegal private lending ring "Director Lee," which targets people in their 20s and 30s. They posed as a legitimate lending company and were found to have pushed ultra-short-term, ultra-high-interest loans with an annual rate of up to 6,800% and carried out illegal debt collection.
On the 29th, the Financial Supervisory Service said it received a total of 62 reports of damages related to Director Lee, with 45 filed in January–February this year. According to the Financial Supervisory Service, the group operated in an organized fashion with divided roles. Brokers lured victims on loan sites or online communities by appearing to be a normal lending company. They then cited reasons such as poor call quality to provide an alternative contact and steered victims to communicate with Director Lee, an illegal operator.
Director Lee handled ultra-short-term, ultra-high-interest small loans, including an average loan amount of 1 million won, a loan term of 11 days, and an annual interest rate of 6,800%. During the process, they demanded as collateral excessive personal information such as a handwritten IOU including the victim's face, an ID card, and family contact information. They also executed "rotating loans," in which they first gave 700,000 won and made the borrower take out the remainder elsewhere.
If a victim fell into arrears, they used burner phones and messengers to inform family members and acquaintances of the debt and send threatening messages. Among Director Lee's victims, those in their 20s and 30s accounted for 72.6% (45 people). More than half of the young victims were concentrated in the Seoul metropolitan area. Most victims borrowed for living expenses and medical bills to make ends meet. Some were multiple borrowers who, in addition to institutional lending, used several illegal private lenders at the same time.
The Financial Supervisory Service is pursuing actions including referring the case for investigation, freezing account transactions, and suspending mobile phone service. It is also blocking illegal ads and supporting victims. Reports of illegal private lending damages totaled 17,538 last year, up 13.9% from a year earlier.