Abstract

Illegal money lending is widespread even though the crackdown on the activity has continued. This type of lending is criticised for its high interest, insufficient documentation of consumer protection, and coerced money collection. Despite the danger associated with illegal money lending, many money‐stricken consumers accrue debts from illegal lenders because they cannot establish a legal loan from a bank.

Illegal moneylenders undoubtedly cause economic damage with high interest on their loans and threaten borrowers for late payment or non‐payment. The current law enforcement is so weak in arrest, indictment, and punishment in jail‐term that many illegal lenders conduct business with little to no consequences.

The city of Seoul built a special law‐enforcement department to crackdown efficiently on illegal lending. The department has to run an intelligence unit that monitors and analyzes illegal lending advertisings, and seeks out large‐scale illegal organizations. In addition, the city has to establish an integrated body that counsels with victims of illegal lending through financial documentations and assists them with lawsuits.

Contents

01 Introduction

1_Research Background

2_Research Questions

02 The Overview of Illegal Lending

1_The Legal Definition of Illegal Lending

2_The Illegal Lending Activity

03 The Government Action Against Illegal Lending

1_The Law Enforcement on Illegal Lending

2_The Court Decision on Illegal Lending

04 The Policy Recommendation for the Crackdown on Illegal Lending

1_The Estimation of Illegal Lending

2_The Aggressive Crackdown on Illegal Lending