President Lee: “Illegal High-Interest Private Loans to Be Strictly Cracked Down and Severely Punished”… 2,060 Arrested in 8 Months

On July 15, President Lee Jae-myung announced a strict crackdown and severe punishment policy against illegal high-interest private loans, urging citizens to actively report such cases. This measure comes after the number of illegal private financing cases rose by over 30% in one year due to the proliferation of non face-to-face loans via online platforms and social networking services (SNS).

President Lee Jae-myung is speaking at the ministry work report held at the Blue House Guest House on the 15th. This is the second work report since his inauguration, attended each time by about 20 members of the ‘Public Participation Group.’ July 15, 2026 [Photo by Blue House Press Photographers] Yonhap News Agency

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On the same day, President Lee posted on X (formerly Twitter), stating, “Illegal high-interest private loans will be thoroughly cracked down on and strictly punished,” and added, “I would like to thank the police for their efforts.” He continued, “I also ask for reports from you, the citizens.”

President Lee also emphasized that victims should actively utilize legal protection mechanisms. He explained, “If the annual interest rate exceeds 20%, the interest is invalid and borrowers do not have to pay it; if a contract stipulates an annual interest rate exceeding 60%, the entire agreement is void and the principal does not need to be repaid,” and added, “Coercive demands for repayment are also a crime.”

According to the report, “Current Status and Measures to Enhance Arrests Related to Illegal Private Financing Crime Organizations,” prepared by the Presidential Secretary for Public Safety at the Blue House and attached to President Lee’s post, the police have been conducting a special crackdown on illegal private financing from November last year through October this year.

During the eight months from November last year to June this year, the police uncovered 1,825 illegal private financing cases, arrested 2,060 suspects, and detained 76 of them. Compared to the same period the previous year, the number of illegal private financing cases increased from 2,784 to 3,685 (up 32.4%), arrests rose from 1,536 to 1,825 (up 18.8%), and the number of suspects detained increased from 1,769 to 2,060 (up 16.4%).

Illegal private financing crimes have shown a steep increase over the past three years. Cases surged from 2,126 in 2023 to 3,391 in 2024, and to 5,519 last year. The number of cases last year jumped by 62.8% compared to the previous year. The number of suspects arrested also rose from 2,160 in 2023 to 3,425 in 2024, and to 4,292 last year. Pre-indictment seizure amounts for recovering crime proceeds also increased during the same period, growing from 6.2 billion won to 18.7 billion won, and to 30.9 billion won.

Illegal private financing has also begun to evolve into a corporate-style crime with designated roles. Since last year, police have detected three crime organizations specializing in illegal private financing. The Metropolitan Investigation Unit at Gyeonggi Nambu Police Agency investigated a group that rented an apartment to use as an office and assigned members to the leader, middle manager, contract, and collection teams. This organization issued illegal loans totaling 1.4 billion won from May 2024 to May this year, collecting 670 million won in interest. Thirty-three individuals were referred for prosecution, including 15 who were detained, and the police are continuing to investigate related money-laundering organizations.

The Gangwon Provincial Police referred 46 members of a group that used online brokerage sites to advertise “non face-to-face quick loans,” provided 2.2 billion won in unregistered loans, and sent threatening messages to overdue borrowers. Similarly, the Seoul Metropolitan Police arrested 33 members of a group that advertised on SNS that “even those with bad credit can obtain loans,” provided 1.8 billion won in illegal loans, and threatened to distribute photos containing personal details if borrowers were late on payments.

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