▲ Government Policy Coordination Minister Yoon Chang-yul (Yonhap)

govt-illegal lending

Gov't to crack down on illegal private lending disguised as gift certificate transactions

SEOUL, May 21 (Yonhap) -- An interagency task force charged with eradicating illegal private lending decided Thursday to step up its clampdown on illicit lending disguised as gift certificate transactions.

As the government expands its crackdown on high-interest loan businesses, loan sharks have increasingly turned to gift certificate trades. Under this scheme, borrowers sign contracts to receive money from lenders in exchange for a promise to provide gift certificates worth much more than the borrowed amount.

Earlier this month, a woman in her 30s was found dead in an apparent suicide after suffering from pressure by a private lender from whom she had borrowed money through a gift certificate transaction. Police have banned the lender from leaving the country pending an investigation.

On Thursday, Government Policy Coordination Minister Yoon Chang-yul presided over the task force meeting and decided to subject these gift certificate transactions to loan business regulations and provide victims with the same support as other victims of ordinary loan sharks.

The government will also expand investigations into internet sites that serve as intermediaries for these transactions.

"As new types of illegal private lending could emerge in the future, the government will make sure to thoroughly crack down on these crimes and help victims," Yoon said.

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