For victims of advertising fraud, the real battle begins not at the moment of deception but afterward. Even when they decide to pursue legal action, they often hit a wall. One person who understands this wall better than anyone is Choi Jin-hyuk, the head of the Minseong Sangsaeng Research Institute. This nonprofit organization was formed by a group of like-minded lawyers and voluntary victims to assist small business owners who struggle with legal costs or lack knowledge of the relief process. They provide free or minimal-cost support for legal responses, including consultations, sending certified letters, and drafting complaints.
Choi's motivation to help victims stems from a surprisingly humble beginning. After being assigned to a social welfare facility as a public service worker in his thirties, he began to explore the small business community 'It Hurts Because I'm a CEO' during his free time, drawing on his past experience in advertising. He was struck when he saw entire pages filled with posts about advertising fraud. This frustration led him to start helping victims without any compensation, resulting in numerous successful cases. Operating under the nickname 'Indomitable Driver,' he runs a Naver blog where he exposes the names and unfair practices of fraudulent companies while sharing tips for victim relief.
On June 10, the investigative team from Aju Economy met with Choi in a studio in Gangnam, Seoul, to delve into the realities of advertising fraud. Drawing from his extensive experience with hundreds of consultations, he outlined the timeline of these scams and how to respond. While the language used by different companies may vary slightly, the methods they use to ensnare victims are remarkably similar. By tracing the tactics from initial contact to payment, evasion, and delayed responses, one can understand why this industry has persisted for so long.
Fraudsters primarily target novice business owners who have recently registered their businesses on portal sites. They often call stores within a month of their opening, posing as Naver representatives or claiming to be selecting local outstanding businesses. If the victim remains on the line, they subtly lead them to make a payment without ever explicitly mentioning the word 'payment.' Instead, they mislead the business owner by asking to check their credit card limit, ultimately pushing them to complete the transaction.
When business owners realize the situation and demand to cancel the contract, the scammers' demeanor changes drastically. They may cut off communication, claiming that work has already begun as stipulated in the contract, or they may pressure the victim with excessive penalties that deduct a significant portion of the principal. For instance, when a contract worth 1.32 million won was attempted to be canceled after a month, the victim received only 400,000 won back after being charged 100,000 won for each of a few blog posts that were hastily created.
Small business owners find themselves trapped in contracts and legal frameworks that cleverly evade the law, leaving them powerless to recover their funds.
What adds to the despair of these victims is the cold indifference of public relief systems. Choi points out the contradictions in current laws and the limitations of judicial institutions, stating, "When victims knock on the door of the Korea Consumer Agency, they receive a standard response: 'You are not a consumer but a business engaging in business-to-business transactions, so we have no jurisdiction.'" He adds, "No matter how much they appeal to law enforcement or mediation agencies, they are met with the same refrain that there is nothing that can be done under the law," emphasizing that the structure that categorizes sole proprietors or small businesses with fewer than five employees as the same as large corporate decision-makers is fundamentally flawed.
As the law and regulations continue to ignore victims trapped in the 'business' framework, one individual has stepped up to take action. Choi's chosen method is the popularization of legal knowledge and what he calls a 'counter-offensive strategy' in litigation. Fraudulent companies embed toxic clauses in their contracts to prepare for future lawsuits, specifying that cases must be tried in their local courts. This regulation creates a significant barrier for small business owners, as it is practically impossible for them to take time off during the day to travel to distant courts.
Choi has turned this structural asymmetry on its head. He recognized that company representatives are often embroiled in simultaneous lawsuits from victims across the country. He submitted a statement to the court highlighting the unfairness of the clauses, establishing a method to transfer the jurisdiction from the company’s favorable court to the court where the victim resides. He is also sharing this strategy with victims through his blog.
Once the jurisdiction shifts to the victims' local courts, the balance of power changes. Fraudulent companies, unable to manage lawsuits in courts across the country, often withdraw their cases or agree to refunds. This strategy not only leads to victories but also makes it nearly impossible for the opponent to fight back. Thanks to Choi's efforts, more small business owners are standing alone in court, achieving refund judgments ranging from 90% to 100% against fraudulent agencies.
However, even if the jurisdiction is shifted and the advantage gained, another wall remains: the costs associated with litigation. From attorney consultations to sending certified letters and drafting criminal complaints and civil lawsuits, individuals face legal costs that can reach hundreds of thousands of won. For small business owners whose losses range from 1 million to 2 million won, the costs to reclaim their rights can paradoxically exceed the original losses. Consequently, many are forced to abandon their pursuit of justice due to financial constraints.
Choi's commitment to helping victims stems from this reality. He has been providing consultations and document preparation at no cost or minimal fees to ensure that small business owners do not give up their rights. Additionally, he guides victims through the legal response process via his blog. During the previous W○Commerce incident, which affected thousands of victims, the Minseong Sangsaeng Research Institute's legal team worked tirelessly to provide legal assistance.
Choi expressed frustration, stating, "When the loss is between 1 million and 2 million won, the combined costs of attorney consultations, certified letters, and complaint drafting can far exceed the original amount lost. Fraudulent companies know that small business owners without legal knowledge and financial resources will ultimately fall at this point."
Recently, the Fair Trade Commission has belatedly taken action by referring 18 malicious advertising agencies to the police for investigation on fraud charges. However, the industry continues to see clever tactics, such as changing corporate names and signs when refund demands surge. The market has become so muddled that even payment gateway companies handling small business card transactions have classified these advertising agencies as gambling-related businesses, strictly limiting approval limits. The rapid emergence and disappearance of fraudulent companies outpace the government's ability to respond, highlighting the grim reality of this social crime.
Ultimately, a structure exists where only with the support of someone willing to bear the legal costs can victims hope to stand in court. In a situation where public relief systems are paralyzed, the goodwill and efforts of individuals are essential, underscoring the structural limitations of this crime. In a reality where the speed of legal protection lags behind the evolution of crime, the assistance provided by the Minseong Sangsaeng Research Institute starkly illustrates the urgent challenges that must be addressed in our society's crime prevention systems.
* This article has been translated by AI.
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