Whom to call to get your feet back on the ground
“Most of the victims who call in don’t even know the name or business registration number of the loan provider and apply for a loan,” said one representative from the help line.
If the loan provider is officially registered, victims can file an official complaint through the help lines of the Korea Consumer Finance Association (02-3487-5800), the Financial Supervisory Service (02-3786-8655~8) or the National Police Agency (1379).
Under the law, registered loan providers cannot exceed the annual interest rate limit of 49 percent. It is illegal to make threats, verbal or otherwise. It is also illegal for loan providers and those who mediate loans to charge additional costs other than the basic interest rate. Those found to have broken any of the aforementioned laws can be sentenced to a prison term of up to three years or be fined 30 million won.
“The registered loan providers who wish to continue with their business take a warning from the help line seriously and usually return the money to the victims,” said Lee Jae-sun, the director of the help line. “Even if one takes out a loan fully aware of the extremely high interest rate, if the rate exceeds the percentile stipulated by the law, the victim has the right to claim the loss.”
In reality, the solution to the problem is not that simple. In most cases, it is impossible to recover the loss. Most loan sharks use a mobile number registered under a false name and according to the police, that makes it impossible to track and investigate the source of the crime.
Although it’s never a good idea to take out loans from an unreliable source, if one is desperate enough to try, it’s crucial to check with the city or district office about the loaner’s legitimacy and for a business registration number. If possible, it’s better to visit the office of the loan provider in person and to sign a proper contract.