Internet communities and social media (SNS) are being used as major channels for illegal private lending. On SNS, lenders post borrowers' faces and personal information, and consultations for illegal private lending with interest far exceeding the legal maximum are conducted through anonymous messengers.

According to materials the Financial Supervisory Service submitted to Lee In-young of the Democratic Party of Korea on the 16th, reports of illegal private lending totaled 17,538 last year, the highest in 13 years. Reports in the first quarter this year reached 4,454, up 10% from the first quarter a year earlier.

A channel on Instagram that publishes a debtor's personal information (left) and a text message received by an acquaintance of a victim facing illegal collection (right)/Courtesy of Reader Submission

To get a loan from illegal private lenders, borrowers had to send their address, workplace, an ID card and resident registration, a promissory note, and photos or videos showing their face.

If the money was not repaid by the due date, illegal private lending firms pressured the borrower by uploading the borrower's photos and videos to Instagram and then sending them to acquaintances. Some firms did not ask for information beyond an ID and resident registration in exchange for charging a 70% fee on the borrowed amount.

There are also gift card loans via Naver Cafe. Illegal private lending firms had victims write posts saying they were selling gift cards below market price, then wired money to disguise it as a normal transaction.

Details of an illegal private lending consultation posted on social media./Courtesy of Reporter Im Hee-jae

To respond to the rise in illegal private lending, the government allowed reports to be filed with only an SNS account and eased requirements so that acquaintances or family members can apply for the borrower representative system. The number of borrower representative support cases was 11,083 in 2025, up 258% from the previous year (3,096).

A Financial Supervisory Service (FSS) official said, "Many people do not know they are victims of illegal private lending. We are preparing grounds to improve awareness of illegal private lending and to impose enforcement obligations on platform operators." The official also said, "Even if a victim agreed to waive portrait rights or to SNS collection, it has no effect. If harmed by SNS collection posts, victims can request immediate deletion or blocking through the government and related agencies."

If you are exposed to illegal private lending damage, you can report it to the Financial Supervisory Service (1332) to receive necessary help, and if you are struggling with excessive debt, you can get help from the Korea INclusive Finance Agency (KINFA) (1397) or the Credit Counseling & Recovery Service (CCRS) (1600-5500).

Note: Loan contracts with an annual rate exceeding 60% render both principal and interest void.

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