Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Financial authorities, firms join hands to support jeonse scam victims
Victims of jeonse frauds in tears during their press conference held in front of the presidential office in Seoul, Thursday. Yonhap
By Anna J. Park
By Anna J. Park
Financial regulators and major financial groups have begun providing various support programs for victims of housing rental fraud, following a series of suicides committed by victims of cruel “jeonse” scams.
Jeonse is Korea's unique housing rental system known for its lump sum payment, requiring tenants to pay some 50 to 90 percent of a rental house's market value as a one-time payment at the time of moving in, instead of monthly rent. Tenants are supposed to receive the large-sum deposit money back at the end of tenant contracts. But, swindlers have misappropriated deposits, incurring huge financial and existential damage to victims.
Recently, a jeonse scam involved hundreds of victims, particularly in the area of Michuhol district in Incheon. There, three of the victims took their lives out of desperation, as their residences were auctioned off and they faced imminent eviction. Upon the third such suicide last week, financial regulators and the financial sector jointly decided to suspend the ongoing auction of the residences. The financial authorities have been closely monitoring auction schedules for the residences of jeonse scam victims.
Aiming to provide further necessary legal and financial support for victims, the Financial Supervisory Service (FSS) on Sunday set up a taskforce team. The taskforce team will manage financial and government institution support for jeonse fraud victims while examining and delaying auction schedules of houses that were subject to jeonse scams.
The taskforce team provides consultations for jeonse fraud victims, along with detailed information on available financial support for them. The FSS taskforce team is planning to cooperate with other ministries' support programs for jeonse fraud victims. The financial watchdog agency has also been operating a one-stop help and support consultation center for jeonse scam victims since Friday.
A victim of jeonse fraud burst into tears during a press conference held in front of the presidential office in Seoul, Thursday. Yonhap
In line with the move, financial companies are also providing financial support for the victims.
Woori Bank announced a financial support package totaling 530 billion won ($397 million) for jeonse scam victims. Each household of the victims can get a loan of up to 150 million won; those who wish to purchase new housing can also get a loan of up to 200 million won with a maximum of 40 years. Those who wish to participate in auctions for their residence can also get loans of up to 200 million won. The loans will be provided at the lowest interest rates.
Shinhan Bank provides identical loans for households of jeonse fraud. The bank donated 1.5 billion won to the Korea Legal Aid Corporation for supporting the legal fees of the victims. Hana Bank also supports loans amounting to 500 billion for the victims. KB Kookmin Bank is running a similar loan program for the victims.
Credit card companies, including Lotte, BC, Samsung, Shinhan, Woori, Hana, Hyundai, KB Kookmin and NH NongHyup, are providing support for victims, such as the extension of debt maturity.
The financial authority expects to see more of these support mechanisms, with the combination of financial companies' voluntary efforts and the government's support measures.
“The FSS will continue to closely cooperate with related ministries as well as financial companies to bring the necessary support for jeonse fraud victims,” the FSS said.