The exchange for the debt economy
Source: site
“Mom, Dad. If anyone contacts you because of me, please pay it back for me. I’m sorry.”
Kim Sun-woo (a pseudonym), 30, stared into the camera with teary eyes, struggling to continue speaking. Perhaps out of anxiety that his face might spread across social networking services (SNS), he repeatedly swallowed and sighed even within the short video. Despair was evident on Kim’s face as he was forced to borrow money using the contact information of his family and acquaintances as collateral.
Some illegal lenders continue their vicious debt collection practices, lending ultra-short-term money to young people and then circulating the fact among acquaintances and on social media if they fail to repay. Critics say that swift, government-wide action is needed, given that young people just starting their social lives can fall into ruin from a single wrong choice.
According to reporting compiled by Seoul Economic Daily on Tuesday, five illegal debt collection accounts on Instagram have publicly posted photos and videos of 128 people, holding loan promissory notes or exposing their faces.
Their photos and videos reveal names, resident registration numbers, and places of residence. The promissory notes show that most are ultra-short-term loans of 400,000 to 600,000 won with maturities of three to seven days. Illegal lenders receive promissory notes, photos, and videos before lending small amounts, then first notify acquaintances if the borrower falls into arrears, and disclose them on social media if they still cannot collect the money. Some photos and videos show illegal loan sharks insulting victims as shameless people who committed adultery, gambling, or sexual crimes, or show victims bowing at temples or standing on their heads.
In particular, the promissory notes contained anti-human-rights content such as “I agree to debt collection from all acquaintances on social media in case of arrears” and “I agree to waive portrait rights.” There were also cases where family relationship certificates containing the names and birth dates of the debtor’s family were disclosed. One counselor specializing in illegal private lending victims explained, “The lenders operate by first receiving the debtor’s photos and handwritten pledges before lending money,” adding, “In many cases, they first contact acquaintances when in arrears, and if they cannot collect repayment, they disclose it on social media.”
The problem is that the posts disclosed by illegal lenders on SNS accounts spread indiscriminately online. Some posts were shared more than 100 times within Instagram, with cases of being shared more than 300 times. Posts disclosed to an unspecified number of people spread even to victims’ friends and work colleagues, destroying individuals’ lives.
A significant number of victims were found to be young people. In one illegal debt collection account, 49 of a total of 67 posts were of people in their 20s and 30s born after 1988.
Experts believe that illegal private lending is spreading rapidly among young people. According to the “Report on the Status of Small Business Owners’ Illegal Private Lending Damage” published by the Gyeonggi Welfare Foundation last October, the proportion of victims in their 20s and 30s was 12.4% and 28.0%, respectively.
This is because young people’s lives are becoming increasingly difficult. According to Statistics Korea, the youth employment rate in May was 43.8%, the lowest since May 2020 (42.2%). In the first quarter, the nominal income of household heads aged 39 and under (5.39 million won) decreased 1.7% from a year earlier, the only decline across all age groups. Seok Hee-jung, a research fellow at the Gyeonggi Welfare Foundation, stressed at a National Assembly debate on Friday, “Recently, data showing the influx of young people into illegal private lending has frequently appeared as outlier values,” adding, “This is a situation that requires government attention.”
Authorities are also aware of the seriousness of such illegal debt collection. However, observers say the matter is serious, as the illegal debt collection SNS posts have been exposed unguarded for seven months. Financial authorities, who have no authority over information and communication service providers, refer illegal posts to the Korea Communications Standards Commission to request deletion from SNS operators when found, but response speed is slow due to barriers between ministries. A financial authority official said, “We are preparing a law revision so that financial authorities can directly request deletion from SNS companies.”
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