PPP, government agree to seize profits from rental fraud

Social Affairs

Published: 20 Apr. 2023, 17:07 Updated: 20 Apr. 2023, 17:13

PPP, government agree to seize profits from rental fraud

Victims of the rental fraud demand a meeting with President Yoon Suk Yeol while protesting in front of the presidential office in Yongsan. Seoul, on Thursday. [YONHAP]

The People Power Party (PPP) and the government have agreed to seize all profits made through organized fraud involving long-term rental deposits, or jeonse.

Victims will also be given priority in purchasing back their property when auctioned.

“We have discussed measures to practically help the victims of jeonse fraud,” Park Dae-chul, PPP’s head of policy committee, said.

He said the party and government have agreed to first work on suspending auctions of homes already up for auction until the victims’ housing situation has stabilized.

“We will review additional measures to allow tenants to be the first to purchase homes being auctioned from jeonse fraud,” Park said. “Also, we will push for measures that will allow the victims to borrow loans with low-interest rates for an extended period.”

He said the party and the government have agreed to find rational solutions to protect the rights of the tenants as well as the people who bought the auctioned property.

However, Park said the party and the government disagreed with a proposal made by the rival Democratic Party calling on the government to buy the auctioned housing.

“Even if the public sector purchases homes at a loss, the profits only benefit the creditors who will be the first to be paid off from the auction, and therefore it is not a solution that would fundamentally help the victims,” Park said.

Minister of Land, Infrastructure and Transport Won Hee-ryong on Wednesday made a similar comment during a press conference.

Park said it isn’t right “to pass the burden onto the people” through taxes.

The PPP also asked the police to launch a special investigation into Nam Heon-gi, the man at the center of the jeonse fraud in Incheon’s Michuhol District, and his possible connections with a politician based in Incheon.

Nam was indicted and detained in March for allegedly scamming 26 billion won ($19.7 million) from 327 tenants.

However, according to the Incheon police, the damage claims are rapidly rising as Nam used other people’s names to acquire 2,700 residential properties in Michuhol.

As of March, the police said it had received claims from 944 tenants against Nam with damages amounting to 70 billion won.

The government estimated that, including other additional scams, the jeonse fraud in Michuhol in Incheon alone amounts to 2,479, with 1,523 units being auctioned.

Though jeonse scams first surfaced when faux landlords failed to pay off taxes on their properties or return deposits to their tenants, it recently resurfaced after a 31-year-old woman killed herself after falling victim to the Michuhol scam.

Like many of the victims in Michuhol, not only did she have little chance of seeing her 90 million won deposit again, but she also faced eviction with her apartment being auctioned.

So desperate was her situation that she couldn’t pay off the utility bill and even asked her mother to wire her 20,000 won.

She was the third suicide involving victims of jeonse fraud. All three of the deceased individuals were young people in their 20s or 30s.

Her death on Monday prompted President Yoon Suk Yeol to order the government to come up with more aggressive measures to help the victims of jeonse fraud.

If you or someone you know is feeling emotionally distressed or struggling with thoughts of suicide, LifeLine Korea can be contacted at 1588-9191. The Seoul Foreign Resident Center offers English-language counseling. Contact 02-2229-4900 to arrange a session. Other international helplines can be found at www.befrienders.org.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]