The government will pursue four additional measures to combat illegal private lending, focusing on online advertising, investigative access, platform responsibility and faster victim support. The plan was discussed on October 2 at the fourth meeting of the pan-government task force chaired by the head of the Office for Government Policy Coordination. Participating agencies included the Financial Services Commission, Ministry of Justice, police, communications authorities, Financial Supervisory Service and debt-recovery support bodies.
Illegal lending arrests increased from 1,017 in 2021 to 3,366 in 2025, but reported cases also rose from 1,362 to 5,519 over the same period. The government said operators are using increasingly sophisticated tactics, including social media, remote transactions, threats involving victims’ personal images and disguised lending linked to gift cards or vehicles. The figures have prompted officials to seek stronger prevention and response measures.
First, the Korea Federation of Banks and Credit Finance Associations will be asked to expand voluntary pre-screening from major newspapers and broadcast advertising to all online loan advertisements. Platforms and other advertising channels would be required to check whether an advertisement has passed review, with fines planned for violations. The government is also considering an online advertising whistleblower program, including illustrative rewards of 5,000 won for reporting unreviewed or unlawful advertisements and 500,000 won for reports tied to illegal private-lending operations.
Faster referrals and victim protection
The authorities will also review undercover investigations for illegal lending and consider a special reporting period for victims who avoided reporting because lenders forced them to participate in unlawful acts or because they feared punishment for separate conduct. A draft amendment to the lending business law is to be prepared immediately, while the reporting initiative is being considered for the first half of 2027. Separately, communications authorities plan to review platforms’ removal and blocking performance under the self-regulatory framework for illegal online information.
The one-stop support process is also due to change. Police personnel are planned to be assigned to the Credit Counseling and Recovery Service in the fourth quarter of 2026, allowing a direct investigation request when a victim’s consultation indicates an urgent need. Through September 25, the service had recorded 6,095 illegal-debt consultations, 4,475 initial interventions, 708 negotiated closures, 159 cases receiving combined support and 142 phone-number suspensions. People exposed to illegal lending can report to the Financial Supervisory Service at 1332; those facing excessive debt can seek help from the Korea Inclusive Finance Agency at 1397 or the Credit Counseling and Recovery Service at 1600-5500. Contracts carrying annual interest above 60% are void for both principal and interest.