The FSS announced on June 7 that it will conduct on-site inspections of lenders and online lending brokerage sites from June 8 to August 28. Approximately ten companies will be selected for inspection based on complaints, reports, and past inspection records.
This initiative comes as the number of borrowers has increased for the first time in five years, driven by low-credit and low-income individuals facing difficulties accessing first-tier financial institutions. The FSS aims to prevent illegal and unfair practices targeting these vulnerable groups.
The inspections will focus on malicious practices that exploit borrowers' lack of information or precarious situations, particularly in the areas of illegal debt collection, violations of legal maximum interest rates, and connections to illegal private financing.
In the illegal debt collection sector, the FSS will examine cases involving collection efforts on debts that have been discharged through bankruptcy or are under debt adjustment procedures, as well as coercive collection practices involving third parties such as family members or colleagues.
Violations of maximum interest rates will also be a key focus. The FSS will investigate instances where lenders execute high-interest loans under the guise of assessing repayment ability or engage in practices like 'bait loans' and 'trick loans' that inflate effective interest rates by deducting upfront fees.
Inspections of online lending brokerage sites will be conducted in collaboration with the Gyeonggi Province Special Judicial Police. The FSS plans to verify whether users' personal information is being illegally transferred to private lenders, leading to unsolicited loan offers.
An FSS official stated, "If illegal activities are discovered, we will take strict action in accordance with relevant laws. We will prioritize borrower protection by halting illegal debt collection and invalidating interest rates that exceed the maximum limit, while also working with special judicial police to close gaps in the oversight of registered lenders and investigations into illegal financing."
* This article has been translated by AI.
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