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Police bust loan shark ring that charged 3,000% interest

Published: 13 May. 2025, 15:15

Seoul Dongdaemun Police Precinct [YONHAP]

A criminal loan shark ring that charged annual interest rates exceeding 3,000 percent and distributed nude photos of borrowers as blackmail has been busted by Seoul police.

The Seoul Dongdaemun Police Precinct announced Tuesday that it had arrested 34 people, including the ringleader, on charges of violating lending laws and forming a criminal organization. Six suspects have been formally detained.

From October 2022 to July 2023, the group offered so-called "30-50 loans" — lending 300,000 won ($212) with the demand that 500,000 won be repaid within a week, primarily targeting young people with low credit scores. This amounted to annual interest rates exceeding 3,000 percent, far above the legal cap of 20 percent.

Police said the group extorted approximately 1.16 billion won from 179 victims.

As collateral, the group collected nude photos of borrowers along with the contact information of their acquaintances. In cases of delayed payment, they created and distributed prostitution flyers using the images to the borrower’s friends and family.

They also called borrowers’ acquaintances to hurl verbal abuse and threats. The ringleader even installed a soundproof booth in the office to allow employees to yell profanities and threats without being overheard.

A flyer for quick loans is put up on street in Jongno District, central Seoul, on April 27. [YONHAP]

The ring conducted all lending transactions remotely via text messages and KakaoTalk and relocated their office every three months to avoid detection, police said.

The ringleader of the group evaded police for 10 months after skipping a court hearing for his arrest warrant in July of last year, going so far as to use disguises. He was eventually arrested late last month at a golf course in Gangwon after police received a tip.

To prevent the circulation of explicit content, authorities seized suspects’ mobile phones and partnered with the Digital Sexual Crime Victim Support Center to help delete any distributed footage. Police also filed lawsuits with the Financial Supervisory Service and the Korea Legal Aid Corporation to nullify the illegal loan contracts, with trials now underway.

“We will continue to crack down on illegal private lending schemes that prey on financially vulnerable individuals in difficult economic times,” said a police official.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY HYEON YE-SEUL [[email protected]]