Loan sharks convicted of charging debtors up to 1,560% annual interest

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Four loan sharks have been convicted of charging debtors exorbitant interest rates of up to 1,560 percent a year, far more than the legal maximum of 20 percent.

The Seoul Central District Court on Monday sentenced the 28-year-old leader of a loan shark syndicate to five years in prison for illegally lending money at excessively high interest rates and threatening debtors who were unable to pay off.

Each of the three other members was also given suspended prison terms between 12 and 18 months.

To rehabilitate the gang members and to protect society from their further crimes, they “need to be isolated for a considerable time,” Judge Lee Jong-min said.

A small business owner surnamed Lee was one of their victims.

After failing to pay off a debt of 2 million won ($1,450), he borrowed from the syndicate in October 2020. He soon found himself trapped with a snowballing debt, with gang members constantly threatening to kill him and his girlfriend, as well as their families. They demanded he pay back the interest, which, by then, had exceeded the principal amount.