With a wave of used-car loan scams targeting retired older adults and young job seekers, financial authorities urged consumers to be cautious. Observers noted that even if the scammer runs off with the loan funds, the loan contract is often validly executed, leaving victims to shoulder the debt in full.
The Financial Supervisory Service issued a consumer alert at the "caution" level on the 16th as disputes and complaints related to these used-car loans continued.
According to the Financial Supervisory Service (FSS), scammers mainly approached retirees in their 60s and 70s and lured them into taking out loans by saying, "If you buy a used car through a government support program, we will cover the installments and revenue." They then signed contracts for amounts higher than the actual vehicle price and siphoned off the additional loan funds executed by the financial company into their own accounts. The scammers were found to have paid the installments for the first few months to allay victims' concerns before disappearing.
Job scams targeting young job seekers were also uncovered. Some placement agencies ran recruitment ads for freight drivers, saying they would provide trucks with no upfront expense and guarantee high income, to attract applicants. They then had the applicants sign freight truck loan contracts in their names ranging from tens of millions to hundreds of millions of won, and pocketed brokerage fees of up to tens of millions of won under the pretext of business promotion expenses and incidental expenses. Victims ended up stuck with vehicle installment payments and fees for contracted carriage without receiving the promised work.
The Financial Supervisory Service (FSS) explained that even when such damage occurs, it is not easy to obtain relief by claiming invalidation or cancellation of the loan against the financial company. If identity verification procedures such as submitting an ID and verifying the account were properly completed, the obligation to repay the loan, in principle, rests with the contracting party. It added that cases in which defects in the financial company's loan procedures are recognized are rare.
The Financial Supervisory Service (FSS) urged consumers not to agree to sign side contracts when using used-car loans and to personally handle the vehicle purchase and loan procedures. It also emphasized that consumers must not provide false answers during the financial company's verification call, should thoroughly check the market price and accident history of the vehicle, and should borrow only the amount necessary.