Police bust suspected loan shark group that targeted foreigners with high interest rates
Published: 24 Nov. 2025, 13:54
Updated: 24 Nov. 2025, 19:31
![A police investigator, right, presents a search-and-seizure warrant to a member of a loan scheme. [BUSAN METROPOLITAN POLICE AGENCY]](https://koreajoongangdaily.joins.com/data/photo/2025/11/24/eea353f2-0ac0-42a3-9c9e-cfbf3577754c.jpg)
A police investigator, right, presents a search-and-seizure warrant to a member of a loan scheme. [BUSAN METROPOLITAN POLICE AGENCY]
Thousands of foreigners unfamiliar with Korea’s lending rules were allegedly targeted by a group that issued high-interest loans and threatened borrowers who fell behind, according to the police. Investigators say the group charged interest rates seven to eight times the legal limit and collected tens of billions of won in illicit gains before authorities intervened.
The Busan Metropolitan Police Agency said Monday that it arrested six people, including one who led the unregistered loan shark operation. Three suspects were detained. The others were booked without detention. Police are pursuing charges that include fraud and violating the Act on Registration of Credit Business and Protection of Finance Users.
Officers say the group ran an illegal loan business from February 2020 to July of this year. They allegedly lent 16.2 billion won ($11 million) to 9,120 foreign nationals living in Korea. Most of the borrowers worked in factories and came from Thailand, Cambodia, the Philippines, Myanmar and Indonesia.
The group’s leader is suspected of controlling operations in Korea. His father, who ran language institutes in more than 10 Southeast Asian countries, recruited borrowers overseas, police said. The father has a record of similar crimes and is believed to be hiding abroad. Police have requested an Interpol red notice.
Many victims urgently needed cash for living expenses or medical bills for family members back home, investigators said. The group extended loans of 1 million to 5 million won per person at annual interest rates ranging from 90 to 154 percent — as much as eight times the 20 percent legal limit.
One foreign worker who borrowed 3.5 million won at a 105 percent annual rate received 3.47 million won after a 30,000 won upfront fee was deducted and was required to repay 4.62 million won over six months.
![Documents related to illegal loans prepared by a loan scheme [BUSAN METROPOLITAN POLICE AGENCY]](https://koreajoongangdaily.joins.com/data/photo/2025/11/24/f06a51fc-a399-4e1a-91f2-d50fe2dae053.jpg)
Documents related to illegal loans prepared by a loan scheme [BUSAN METROPOLITAN POLICE AGENCY]
The group targeted borrowers who had steady jobs in Korea to ensure repayment, according to police. When borrowers fell behind, the suspects sent threatening letters stating they would “block your wages” or “report you to the immigration office,” actions that constitute illegal debt collection.
To recover the principal and interest, the group fabricated contracts making it appear that borrowers had purchased phones or laptops, then submitted the documents to courts to obtain payment orders. These orders allowed the group to garnish wages and insurance payments. Police said the suspects filed more than 1,500 such applications.
“A payment order becomes final if it is delivered and no objection is filed within two weeks, but many foreign victims were unaware of the legal process and failed to respond,” a police official said. “The group also held business registrations under legitimate names separate from the lending operation and used those entities to produce fake contracts needed for garnishment.”
Police said they froze and secured 2.1 billion won remaining in the group’s bank accounts and issued notices to foreign worker support centers across the country warning of similar schemes. Investigators are reviewing additional charges.
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY KIM MIN-JU [[email protected]]
with the Korea JoongAng Daily
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