A small business owner, referred to as A, signed a contract with a management consulting firm that promised to secure policy funding. The firm demanded an upfront fee of 2 million won, claiming it was for administrative costs in exchange for assistance with a loan within six months. However, after the six-month period passed without government loan approval, A requested a refund, but the firm did not respond. Ultimately, A had to report the case to the Ministry of SMEs and Startups' illegal broker reporting center.
According to the Ministry of SMEs and Startups on the 28th, illegal brokers exploiting the policy fund market have become increasingly sophisticated and organized, often disguising themselves as management consulting firms.
These firms frequently misuse the logos and advertisements of agencies under the Ministry. This leads to fraudulent practices such as falsifying documents, charging success-based fees, and bundling insurance products.
For small business owners, the average loan amount is typically between 30 million and 40 million won, with brokers reportedly taking around 20% in fees under the guise of consulting. As demand for low-interest financial support rises, the tactics of illegal brokers are diversifying.
A Ministry official stated, "Some brokers impersonate public institutions or use the names of former employees to offer consultations on policy funds. As reporting of illegal brokers increases, more victims are coming forward to file complaints."
To combat illegal brokers, the Ministry is implementing measures such as surveys to identify undue third-party involvement, a reporting reward system that pays up to 2 million won, and an amnesty program for self-reporting individuals.
Additionally, the Ministry plans to track the IP addresses of applicants in real time to prevent undue third-party involvement. They are also introducing a system to check for similarities and duplications in business plans to catch brokers who draft plans on behalf of multiple firms. The Ministry aims to ensure that all policy fund loan applications are submitted directly by the businesses themselves.
To address legal loopholes, the Ministry is preparing legislative measures to prevent undue third-party involvement. Earlier this year, the Ministry announced plans to revise the Small and Medium Enterprises Promotion Act to include management guidelines and prohibited activities, but the legislative process has been slow.
The current illegal broker reporting center can only request investigations from relevant agencies based on received complaints, limiting its ability to take proactive measures. Critics argue that merely operating the reporting center is insufficient to eradicate illegal brokers.
For complaints to lead to legal action, there is a need for a clear definition of "undue third-party involvement and proxy actions in the policy fund application process" to be included in the Small and Medium Enterprises Promotion Act, along with a legal prohibition against such actions.
The Ministry official added, "There are various cases of reports related to job advertisements aimed at recruiting illegal brokers, but it is often challenging to find evidence during investigations, leading to many cases being treated with caution. It is difficult to gather evidence unless financial damage is evident. We will focus on post-action measures to eliminate illegal broker activities through legal reforms."
* This article has been translated by AI.
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