An organization that pocketed several hundred million won from about 600 people by applying interest rates of up to 18,250% has been sent to prosecutors.
Seoul Mapo Police said on the 10th that they had referred eight people on July 27 on charges of violating the Lending Business Act and the Debt Collection Act. Of them, four people, including the company's head, a general manager, a call center staffer, and a collections staffer, were referred in custody.
Without registering a lending business, they allegedly lent about 1.7 billion won to roughly 600 victims in 1,741 instances and took 840 million won in interest by applying interest rates of up to 18,250%. The current statutory maximum interest rate is 20% per year.
Police found that they operated out of an unregistered office, advertised using lending business registration certificates issued under their own and others' names, and divided roles for phone consultations, in-person consultations and loan execution, repayment management, and collections.
They also hid the company name or gave the name of another company and used aliases, burner phones, and burner accounts to evade investigative tracking, police said. In the debt collection process, they used an application that automatically dialed hundreds of times until the victim answered.
Five of them had already been arrested by police on July of last year. However, after the arrest warrant for the head of the lending company was dismissed and the person was released, they rented a new office and continued operations using the same method.
Police are proceeding with procedures to recover criminal proceeds, including seeking a pre-indictment preservation of confiscation for 160 million won in cash seized on site.
Police said, "If you take out a non-face-to-face loan through an internet site, there is a high possibility you will receive a usurious loan from a lending company run by an illegal loan shark, and you may be subject to illegal collection even after the loan, so caution is needed."