The Ministry of SMEs and Startups said on the 25th that it held the sixth meeting of the "task force on resolving unfair third-party interference," attended by policy finance institutions and the Korean National Police Agency, and discussed the operation status of the illegal broker reporting center and ways to improve the system.
According to the Ministry of SMEs and Startups (MSS), a total of 482 reports were filed with the illegal broker reporting center from Jan. 1 to June 19 this year. Of the reports received, 412 cases (85.5%) were complaints that could be handled through administrative measures such as cautionary official letters from policy finance institutions, the most among all categories.
Cases found to be unlawful and referred to investigative authorities numbered eight (1.7%), and one case (0.2%) was reported to the Financial Supervisory Service. There were 27 cases (5.6%) under investigation to determine whether there was unfair third-party interference.
Policy finance institutions made priority payments of a total of 2.2 million won in reporting rewards for six major reports, including those that led to requests for investigation. Additional rewards will be considered depending on the outcome of the investigations.
A representative case referred for investigation involved using government and public institution logos without authorization to advertise that policy loans could be obtained, then disappearing after receiving a contract deposit and a retainer. Another confirmed case involved forging a loan transaction agreement and a credit guarantee certificate to deceive victims into believing they were official documents issued by policy finance institutions.
The Ministry of SMEs and Startups (MSS) also unveiled the direction of legislative efforts to eradicate unfair third-party interference. First, it will establish new provisions prohibiting acts that induce the drafting or submission of false documents during the policy fund application process, deceive applicants with false or exaggerated advertisements, or demand or receive money or valuables by exceeding the cap on consulting fees. It also plans to prepare penalty provisions that allow the imposition of imprisonment or fines for violations.
It will also push measures to grant the authority to require attendance, statements, and submission of materials, and to provide a legal basis for requesting investigations by investigative authorities if there is noncompliance.
In addition, to protect and encourage whistleblowers, it plans to establish provisions prohibiting disadvantages against whistleblowers and guaranteeing confidentiality of identity, and to newly establish a legal basis for paying reporting rewards and for establishing and operating the reporting center.
Until the law is amended, a "focused reporting period to eradicate unfair third-party interference" will be operated for one month starting on the 29th to strengthen the existing system linking reporting, intake, and investigation. The Ministry of SMEs and Startups (MSS) plans to inform the public of the illegality of unfair interference and the reporting procedure through outdoor advertisements, distribution of promotional materials, and airing of promotional videos.
During the focused reporting period, if a policy fund applicant voluntarily reports facts of unfair third-party interference, incentives for voluntary reporting will be expanded, including fully exempting even active or major participants from participation restrictions and contract termination. The reporting reward will also be raised to 600,000 won from the existing small reward of 400,000 won to encourage reporting.
First Vice Minister Noh Yong-seok of the Ministry of SMEs and Startups (MSS) said, "We will establish a legal foundation to eradicate unfair third-party interference and strengthen a cooperative system among related agencies until legislation is completed," adding, "Starting in June, we will operate a focused reporting period to boost reports of unfair third-party interference and do our best to prevent damage to small and medium-sized enterprises and small business owners."